Analysis of the Five Major Channels for Gold Investment | Where Should Investors Buy Gold

Facing increasing global economic uncertainties and geopolitical risks, more investors are considering gold investment opportunities. But the question is—where can you buy gold safely and cost-effectively? Actually, there are more channels to purchase gold than you might think, ranging from traditional physical gold to modern derivatives trading. Each method has its own advantages and risks. This article will analyze five major gold investment channels to help investors find the most suitable approach based on their risk tolerance and investment goals.

Is now a good time to enter the gold market?

In recent years, gold prices have been remarkable. From the sharp fluctuations in 2022-2023 (peaking over $2,000, dropping below $1,700), to the continuous rise since 2024, and breaking through $3,700 in 2025, gold has shown a clear upward trend. According to Goldman Sachs’ forecast, the gold price could reach $4,000 per ounce by mid-2026.

The driving forces behind this rally include: record-breaking central bank gold purchases (net purchase of 1,045 tons in 2024, exceeding 1,000 tons for three consecutive years), rising expectations of U.S. interest rate cuts, escalating geopolitical conflicts, and more. As we enter early 2026, gold prices remain relatively high, reflecting ongoing market demand for safe-haven assets.

Investors need to understand that short-term gold price movements are difficult to predict, but long-term trends depend on macroeconomic conditions. If your goal is long-term preservation and appreciation, finding the right entry point is crucial—don’t wait for prices to surge before buying. Conversely, if you can tolerate market volatility and aim for quick profits, mastering technical analysis and engaging in short-term or swing trading to capture price differences may be suitable.

Cost and risk comparison of five major gold purchasing methods

Physical Gold｜A traditional hedge asset for wealth preservation

Physical gold includes bars, ingots, commemorative coins, and is the most traditional form of gold investment. Many investors favor physical gold because holding tangible assets provides peace of mind.

But it’s important to recognize: physical gold is not an income-generating asset. It cannot produce interest or dividends; its value relies solely on price appreciation. Additionally, storage costs (safety deposit boxes, insurance), poor liquidity (easy to buy but hard to sell), and other issues can reduce overall returns.

For purchasing channels, large gold bars are recommended to be bought directly from banks (Taiwan Bank is an official choice, starting from 100 grams), ensuring safety but incurring storage fees. Small gold pieces can be bought at jewelry stores, with emphasis on verifying purity. Avoid buying gold jewelry or colored gold bars, as processing costs are high and resale losses can be significant.

Tax tip: Transactions exceeding NT$50,000 must be declared as personal occasional trade income, taxed at a 6% flat rate on gains.

Assessment: Suitable for long-term holding and asset allocation, but less efficient as an active investment tool.

Gold Passbook｜A convenient way without physical possession

Gold passbooks (paper gold) are offered by many banks, allowing investors to hold gold in a bank account without physically storing it. Major banks (Taiwan Bank, CTBC, First Bank, etc.) provide this service, with options for TWD, foreign currencies, or dual currency.

Advantages include moderate transaction costs, small minimum investments, and the ability to exchange for physical gold. Disadvantages are that trading is limited to bank hours, and frequent buying and selling are constrained. Both TWD and foreign currency purchases involve exchange costs. Frequent transactions can accumulate significant fees.

Tax tip: Gains from gold passbook transactions are considered property trading income and should be reported in the following year’s comprehensive income tax. Losses can be deducted within three years.

Assessment: Suitable for low-frequency, long-term investors; not ideal for active traders.

Gold ETF｜Highly liquid index-based investment

Gold ETFs (Exchange-Traded Funds) offer a flexible investment option. Investors can choose Taiwan-listed gold ETFs (e.g., 00635U) or US-listed gold ETFs (such as GLD, IAU).

Cost structure:

• Taiwan Gold ETF: management fee 1.15%/year + transaction fee 0.15% + trading tax 0.1%
• US GLD: management fee 0.4%/year + transaction fee 0.1% + currency exchange 0.32%
• US IAU: management fee 0.25%/year + transaction fee 0.1% + currency exchange 0.32%

Advantages include high liquidity, easy trading, and low investment threshold, making it suitable for beginners and retail investors. However, ETFs can only be bought long; short selling is not available. If you have a bullish long-term outlook and don’t need short-term trading, ETFs are a good choice.

Buying locations: Taiwan ETFs can be purchased through any brokerage; US ETFs require opening an overseas account.

Assessment: Best for long-term, low-cost, hassle-free investment.

Gold Futures｜Leverage-based short-term trading tool

Gold futures allow investors to trade on margin, enabling both long and short positions. They track international gold prices 24/7, suitable for traders seeking quick profits.

Advantages: Leverage amplifies capital efficiency, long trading hours, low holding costs, and favorable tax treatment (futures income is not taxed; only a transaction tax of 0.0000025 applies).

Risks: Forced liquidation at expiration, rollover costs, leverage magnifying losses. Novices should exercise caution.

Buying locations: Taiwan Futures Exchange trading hours are limited; overseas brokers (e.g., CME) offer 24-hour trading with better liquidity and convenience.

Assessment: Suitable only for experienced traders with risk awareness.

Gold CFD｜Lowest barrier derivative trading

Contracts for Difference (CFD) track the spot gold price. Entry barriers are extremely low—some platforms require only $18–$50 to start trading. Compared to futures, CFDs offer greater flexibility: no expiration, no delivery risk, multiple leverage options (1X–100X), and support for both long and short positions.

Main differences from futures:

• Futures have fixed contract sizes; CFDs do not
• Futures have expiration dates; CFDs do not
• Futures incur trading fees and taxes; CFDs generally do not
• CFDs require lower margin

Assessment: Lowest entry barrier but highest risk. Beginners should practice with demo accounts, understand leverage risks, before trading live.

Best places to buy gold｜Choose according to your investment goals

So, where is the most cost-effective place to buy gold? The answer depends on your investment strategy:

For preservation and long-term holding:

• Physical gold: suitable for those with strong psychological comfort and storage conditions
• Gold passbook: safe and convenient, moderate cost
• Gold ETF: hassle-free, lowest long-term holding cost

For short-term opportunities:

• Gold futures: suitable for large capital and experienced traders
• Gold CFD: ideal for small capital and quick entry/exit

Regional recommendations:

• Physical gold and passbooks: Taiwan Bank, E.SUN Bank, Yuanta Bank
• Taiwan ETFs: available through all major brokerages
• US ETFs: via overseas brokerage accounts
• Futures and CFDs: through international trading platforms (many offer 24-hour trading)

Final reminder: Regardless of the method chosen, base your decision on your risk tolerance, capital size, and time commitment. Leverage tools (futures, CFDs) can magnify gains but also losses—beginners should start with low-risk, low-leverage options (like passbooks or ETFs) to build experience before exploring derivatives.

The core of gold investing is not about choosing the most complex tools but about finding channels that match your investment style and maintaining disciplined trading.