Gold has been on a bumpy northern trajectory since the beginning of 2025. If you’re interested in riding the swelling wave (though there’s no guarantee it’ll continue), you may be wondering about the best way to invest in gold. The answer isn’t one-size-fits-all. There are many ways to invest in gold, from physical metals to ETFs to gold IRA companies. Each has its own benefits and disadvantages.
Here’s what to expect when investing in gold—and a few quick questions to ask yourself when deciding on the right strategy for your portfolio.
How does gold work as an investment?
Gold is primarily a store of value. It often retains its value well, as it’s not tied to the value of fiat currencies like the U.S. dollar. This means that while inflation steadily lowers the value of paper money, it doesn’t automatically lower the value of gold—in fact, it can prove to boost its value.
Gold may help your money keep up better with rising prices than a pile of cash sitting in a bank account. This is a big reason why it’s a popular alternative investment option.
Gold behaves differently from stocks and bonds in a few ways. For example:
- It’s less dependent on the performance of the stock market: Gold is sometimes used for industry purposes, but it’s primarily a currency. It isn’t tied to the success of a company or industry.
- It doesn’t “generate” income: You won’t get interest or dividends with gold. Instead, the money you make (or lose) comes purely from the change in spot price.
- It may act as a sort of shock absorber during market panic: This isn’t a rule, but gold has historically held its value during sharp drops in the stock market.
This is not to say that gold isn’t volatile; its price can still swing sharply over a short period, and it’s not guaranteed to stay steady during a recession. You can find evidence of that during the 2008 financial crisis, when gold prices dropped in part because investors rushed to liquidate their gold and raise cash. But despite routine bumps, gold has generally trended up over the long term.
If you’ve decided after reading this that adding gold to your portfolio is the right move for your needs, here are some ways to do so.
6 ways to invest in gold
You’ve got myriad options when it comes to investing in gold. It’s more sophisticated than simply hoarding treasure chests filled with pirate booty (though there’s nothing wrong with that if storing physical gold is your jam). Here are some of the most popular ways to invest in gold.
Physical gold
Physical gold is exactly that—gold you can hold. This includes bullion such as bars and rounds and government-minted coins as well as jewelry.
While all gold can perhaps technically be thought of as an investment, not all gold is “investment grade.” Investment-grade products are typically very high-purity bars and coins (often 99.5% at the very least). If your gold has a lower purity, you may have a more difficult time reselling it quickly at a fair price.
Many jewelry pieces are far below investment grade, but prices are often inflated due to labor, design, and branding. In other words, it’ll likely cost more to buy than investment-grade bullion that contains the same amount of gold.
Gold stocks
Instead of investing in physical gold that you have to store, you can instead put your money into gold stocks. These are shares of a company whose success is tied to gold. Think companies that explore for, mine, or process gold.
Owning gold stocks is very similar to owning gold in that the success of these companies (and therefore your investment) tracks closely with gold performance. However, gold stocks can move more than gold because they’re affected by more things—from company decisions to operational costs to regulatory issues to the stock market as a whole. This makes them riskier than holding physical gold.
It’s also worth noting that gold stocks may pay dividends, unlike physical gold.
Gold funds/paper gold
If you don’t want to invest in a single company with gold stocks, you can instead buy gold funds. These are shares of a fund in a brokerage account, the value of which moves with gold’s performance. Examples include gold ETFs and mutual funds.
Some of these funds own physical gold in a vault, while others own stocks of gold‑mining companies. Performance of the latter depends on both gold prices and how well the underlying companies do.
Using this route to invest in gold gives you exposure to the gold market without the need to pay for insurance and storage—though you will still pay ongoing fund fees.
Retirement accounts
It’s also possible to invest gold in a retirement account. You can deploy your current 401(k) or IRA funds to invest in gold, or you can buy gold with new money and deposit it into your retirement account (you’ll be subject to the same annual contribution limits). Just note that once you’ve deposited your gold, you’ll be penalized if you access it before retirement age.
Only certain types of gold are eligible to be put into a retirement account. The IRS stipulates that only specific gold bars and coins which come from approved mints/refiners qualify. They must also be at least 99.5% purity to qualify (with one exception being the American Gold Eagle coin, boasting just 91.67% fineness).
Some examples of other gold products that should qualify for retirement accounts are:
- American Gold Buffalo coins
- Canadian Maple Leaf coins
- Australian Gold Kangaroo
- Great Britain Gold Brittania
- Austrian Gold Philharmonic
Read our guide to the best gold IRA companies for more guidance on how to invest gold into your retirement account. We’ve narrowed down the lengthy list to competitors with the best customer reviews, transparency, fee discounts, and more.
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Digital gold
Digital gold is basically investing in physical gold without ever having to touch, store, or insure it. You buy it online from a company who stores it for you. You can instantly sell at market price, and you can often take delivery if you so choose.
In every way, digital gold sounds better than physical gold. The catch is that you’re trusting that whichever company holds your gold will remain solvent. You may also be charged nominal storage and transaction fees, depending on which platform you use.
If you’re feeling particularly adventurous, you might also choose to invest in gold-backed crypto, where each token is tied to a specific amount of gold.
Gold trading
More of a “behavior” than a specific product lane, gold trading is a (riskier) way to try and generate earnings. It’s similar to day trading in that you’re making short-term bets with regularity. People who do this are trying to buy low and sell high as often as they can.
With gold trading, you’re buying contracts linked to gold’s price. Depending on what you think gold will do in the coming days and weeks, you’ll either buy or sell contracts. This can result in big gains (and big losses).
To boot, gold trading often deals with “leverage,” which magnifies the exposure you get for your money—for better or worse. Let’s say you invest $500 into gold. If gold goes up by 5%, your earnings should be 5%. With a 10:1 leverage, however, your $500 should instead be worth $5,000. If gold goes up by 5%, you’d have effectively received a 50% gain.
However, this also makes it possible to lose more money than you’re playing with. Leveraged trades can result in you actually owing a broker money.
It should be clear this is not a practice to enter into lightly.
Pros and cons of investing in gold
Pros
- Tangible asset not tied to a single government or company
- Can help to hedge against inflation
- Valuable way to diversify your portfolio
Cons
- Investing in physical gold can be expensive (insurance, storage, etc.)
- Can be volatile in the short term
- Investment historically grows more slowly than the stock market
How to choose the best way to invest in gold for you
To find the best way to invest in gold for your portfolio, ask yourself the following questions.
Why do you want gold in the first place?
Gold should serve a very distinct purpose in your portfolio. Again, it’s not traditionally viewed as an engine for growth (like with stocks), but instead as more of an insurance policy.
Are you looking for a long-term hedge with your gold investment? If so, physical metals or a gold ETF could be the way to go. If you’re interested in the game of frequent buying and selling, you’ll probably want to focus on gold trading products.
Do you want to deal with physical metal?
Remember, possessing physical gold tends to come with ancillary expenses such as insurance storage, account fees (if using a custodian), shipping etc. All that might be worth it to you for the direct control you’ll have over your investment. Or it might not be.
How much effort do you want to put into this after day one?
Do you want a set-and-forget gold investment that doesn’t require upkeep and ongoing maintenance? A gold ETF or digital gold account might well be the way to go.
But if you like closely watching markets and tweaking your strategy along the way, gold trading could suit you better.
Buying and selling physical gold bars and coins can be enjoyable for those that enjoy the hunt of comparing gold dealers and sniffing out good premiums.
How important to you is the ability to sell quickly?
Physical gold and even jewelry can be a way to protect your wealth—but the selling process is more cumbersome than, say, a gold ETF or digital gold that can be exchanged with a few mouse clicks. Selling physical metals requires that you find a buyer and receive a quote. If you’re in a hurry, you may have to settle for a wider spread.
How much are you able to invest?
If you’re unable to buy a considerable amount of gold, you’ll probably want to focus on products like fractional bullion, gold ETFs and digital gold. This should help you to save on fixed costs that remain the same regardless of the amount of gold you buy.
For example, many dealers charge a flat shipping cost, whether you’re buying 10 ounces or 10 grams. You’ll also often find a minimum insurance fee that won’t shrink just because you’re buying a small amount of gold.
The takeaway
There are many ways to invest in gold, from physical bullion to jewelry to ETFs and stocks in gold mining companies. The best option for you depends on factors such as how hands-on you’d like to be, how much money you want to put in, and how quickly you might need to sell it.
FAQs about investing in gold
What are the main ways to invest in gold?
Common ways to invest in gold are physical gold, stocks, funds, retirement accounts, gold trading, and digital gold.
Can I invest in gold with a small amount of money?
Yes, you can invest in gold with a small amount of money. You don’t have to buy a full troy ounce to add gold into your portfolio thanks to fractional gold and the ability to buy relatively low‑cost shares of gold funds and ETFs.
How much of my portfolio should I put into gold?
Experts recommend that you make precious metals no more than 20% of your total portfolio—typically 5% to 10% may be thought of as a good number. Diversifying your investments is key to keeping yourself afloat if one industry tanks.
What fees and costs should I watch for when buying gold?
The fees and costs you should expect depend on the type of gold investing you do. Physical gold can come with costs like insurance, delivery, and storage. Also expect to pay more thanks to the gold dealer’s markup—and you may well end up selling below the market value. For other investments, such as ETFs and digital gold, you’ll often lose money on the “spread” when transacting. That is, you’ll buy for higher than the market price and sell for lower than the market price.
Is jewelry a good way to invest in gold?
Jewelry can be a decent way to own gold, but you’ll almost certainly not be able to trade it as easily as some other options due to its often lower purity. Additionally, you’ll pay markups for the craftsmanship—but typically won’t get the same return for it.
