How to Buy Gold

Gold can be an appealing investment for those looking to hedge against the volatility of paper currencies and the stock market. However, buying gold isn’t as straightforward as some other investments. You’ll need to decide which type of gold investment suits your goals, choose a reputable dealer and plan for secure storage, depending on how you invest in the precious metal. We’ll review how to buy gold, the various forms it can take, and its pros and cons. As with any investment, working with a financial advisor can help you make informed decisions and build a strategy that fits your needs.

5 Ways to Buy Gold

Gold has long been valued as a safe-haven asset, a hedge against inflation and a way to diversify a portfolio. But before diving in, it’s important to understand the different ways you can buy and invest in gold. From physical bullion to financial instruments like ETFs and futures contracts, each method comes with its own risks, costs and storage requirements.

Below are five common ways to buy gold.

1. Physical Gold (Bullion Coins and Bars)

Buying physical gold in the form of coins or bars is one of the most straightforward ways to invest. Bullion comes in various sizes and weights, from small 1-gram bars to larger 1-kilogram bars, as well as coins like the American Gold Eagle or Canadian Maple Leaf. Once you’ve chosen your preferred form and size, look for a reputable dealer. The U.S. Mint offers a list of Authorized Purchasers who are legally allowed to sell certain bullion coins. Avoid unverified sources like pawnshops or online marketplaces such as Craigslist, where authenticity can be questionable.

After purchase, safe storage is essential. Many investors use bank safety deposit boxes or invest in high-quality home safes. For large investments, third-party storage facilities that specialize in precious metals may offer added security and insurance.

2. Scrap Gold (Jewelry and Other Items)

Investing in scrap gold — such as old jewelry, dental gold or broken pieces — can be another way to gain exposure to gold. This option is often more accessible, as you may already own gold items that can be appraised and sold. However, scrap gold usually carries a lower resale value than bullion due to factors like purity and condition. It’s important to get an accurate appraisal and work with a reputable buyer or refiner. This method is better suited for selling rather than long-term investing. But it can still be a source of value in your overall gold strategy.

3. Gold Exchange-Traded Funds (ETFs)

For those who prefer not to deal with physical gold, gold ETFs offer a convenient alternative. These funds track the price of gold and can be bought and sold like stocks through a brokerage account. Popular examples include SPDR Gold Shares (GLD) and iShares Gold Trust (IAU). Gold ETFs offer liquidity, low transaction costs and no need for storage. This makes them ideal for investors who want exposure to gold without the responsibilities of owning it physically. However, you won’t actually own any gold, just shares that reflect its price.

4. Gold Futures Contracts

Gold futures are financial contracts that allow investors to speculate on the future price of gold. This method is more complex and is typically used by advanced investors or traders. Futures contracts are traded on commodities exchanges and require a brokerage account that supports futures trading. These contracts offer the potential for high returns, but also come with substantial risk. Because of their volatility and leverage, gold futures are best suited for short-term strategies and investors with a higher risk tolerance.

5. Gold IRAs (Individual Retirement Accounts)

A gold IRA is a self-directed retirement account that allows you to invest in physical gold and other approved precious metals. Unlike traditional IRAs, which typically hold stocks and bonds, a gold IRA lets you diversify your retirement savings with tangible assets. The IRS permits certain forms of gold, like specific bullion coins and bars, to be held in these accounts, provided they meet purity and storage requirements.

Gold IRAs come with tax advantages similar to traditional or Roth IRAs, depending on how the account is structured. However, they must be managed by a custodian, and the gold must be stored in an IRS-approved depository, not at home. Setup and maintenance fees can be higher than traditional IRAs, as well. But for investors seeking a hedge against inflation or market volatility, gold IRAs offer a compelling long-term option.

Physical vs. Intangible Gold

Gold bars on a stock chart showing the price action of the precious metal.

Investing in gold bullion is undeniably safe. However, you lose a bit of liquidity by purchasing bullion, since you’ll physically need to retrieve your gold and sell it to someone in order to get back to cash. If you’re looking for safety and liquidity, you may be more interested in a gold exchange-traded fund (ETF).

As we mentioned above, with a gold ETF, such as the SPDR Gold Shares fund, you’ll be purchasing shares of a fund that then purchases gold bullion. So, you’ll never actually see or hold the gold. However, the buying and selling process is more streamlined.

When deciding between these two options, it comes down to your priorities. Do you want the peace of mind that may come with being able to see and hold your gold? If so, then bullion may be for you.

Or would you rather be able to move your assets from gold to something else with ease? In that case, you may be more suited to an ETF.

Why to Buy Gold

Buying gold is one way to diversify your investment portfolio, helping to reduce overall risk. Diversification protects you from the possibility that all your assets might lose value at the same time.

Gold is often considered a “safe haven” asset. It has held value for thousands of years, giving many investors confidence that it will continue to do so, even when markets or paper currencies are unstable. If you’re uncertain about the stock market or the future of fiat currency, gold may offer some peace of mind. Another benefit is that gold tends to resist inflation. Because gold is difficult and time-consuming to mine, its supply remains relatively stable, which helps preserve its value over time.

However, it’s important to understand that gold doesn’t generate income. Unlike stocks or bonds, it won’t pay dividends or interest. While its price can rise, it can also fall. That’s why gold should be viewed as a long-term store of value and a stabilizing element within your broader portfolio, not a primary growth engine.

Bottom Line

Investing in gold can be a smart way to diversify your portfolio and hedge against inflation and market volatility. Keep in mind, however, it involves more than simply buying and storing bars. With options like coins, jewelry, ETFs and futures, you can tailor your investment to suit your preferences and risk tolerance. Always buy from reputable dealers and have a secure storage plan in place. If managing physical gold feels too complicated, a gold ETF may offer a simpler alternative. Most importantly, gold should complement your broader investment strategy, not dominate it. Like any asset, it works best as part of a well-diversified portfolio.

Tips for Responsible Investing

If you need help navigating all the different types of investments, a financial advisor could help. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors who serve your area. You can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
When it comes to investing, it’s extremely important to diversify your portfolio to protect yourself from risk. If you’re looking to purchase gold, make sure that it’s just one aspect of your portfolio.
When you’re deciding how to allocate your assets, make sure to think about your rate of return. You always want your investments to be outpacing inflation, otherwise they’ll be less valuable than when you invested in them.