How to Buy Gold (Physical or Not)

Gold has fascinated humans for centuries, and today’s investors are no different.

Whether you’re thinking of purchasing gold in the form of coins, bars, or gold-backed securities, there are compelling reasons to consider adding this precious metal to your investment portfolio.

How to Buy Gold: Key Takeaways
Gold is a hedge against inflation and a store of value, making it a popular choice for investors.
Diversifying your investment portfolio with gold can help protect your wealth during market volatility.
Physical gold, including bullion, coins, and bars, can be purchased from reputable dealers and online sources.
You can also invest in gold-backed securities like ETFs, mutual funds, stocks, and gold futures for added flexibility.
While gold offers stability, it doesn’t produce income, so it’s essential to balance your portfolio with other assets.
Financial advisors typically recommend allocating no more than 10% of your total portfolio to gold investments.
Consider your investment goals, risk tolerance, and time horizon before deciding whether to invest in gold.
Understanding tax implications for gold gains is crucial, as they differ from those of traditional securities.
Be aware of ethical concerns surrounding gold mining and choose responsible sources when buying gold jewelry or bullion.
Regularly monitor gold prices and market conditions to make informed investment decisions.

☞ Why Buy Gold?

Gold is often seen as a safe-haven asset. When prices for other investments, such as stocks or real estate, take a nosedive, gold tends to hold its value.

In some cases, it can even gain significant value when other investments are losing ground. This happens because when markets get turbulent, many investors turn to gold as a reliable store of value.

Additionally, experts view gold as an ultimate hedge against inflation. Its value has endured for centuries, and it has recently reached all-time highs. Gold tends to rise in value when the U.S. dollar weakens, creating a protective shield for your savings during times of eroding purchasing power.

But when should you consider buying gold, and what’s the best way to go about it?

In this how to buy gold guide, we’ll walk you through the essentials of buying gold. We’ll explore the advantages and disadvantages of purchasing physical gold versus investing in various types of gold-backed securities.

☞ Physical gold or not?

If you’re considering buying gold, you have two main avenues to explore:

  1. acquiring physical gold (bullion) or
  2. investing in gold-leveraged securities.
Related:  Why Invest in Gold? (Top 8 Reasons)

Gold-leveraged securities include gold stocks, mutual funds, or exchange-traded funds (ETFs).

Your choice depends on your investment strategy, comfort level, and risk tolerance. Read on to discover how to buy gold, assess its investment potential, and determine if it aligns with your financial goals.

Investing in Physical Gold

Physical gold, known as bullion, is typically available in forms like ingots, bars, coins, or rounds. Rounds, though circular like coins, lack legal tender status and consistent design changes.

Bullion’s value is determined by its gold content, measured in troy ounces (equivalent to approximately 31.1 grams).

Gold bars come in various weights, ranging from 1 gram to 1 kilogram. Investment-grade gold bars adhere to the international standard of 99.5% (995) pure gold and bear markings indicating the manufacturer, purity, and weight.

Pros of Physical Gold

  • Owning physical gold means possessing a tangible, valuable asset that can be easily transferred.
  • Gold bullion historically maintains stable value.
  • Unlike stock portfolios, mutual funds, ETFs, and bonds, gold doesn’t require constant monitoring.

Cons of Physical Gold

  • Secure storage or insurance may be necessary to protect your investment.
  • While reputable dealers abound, fraudulent gold dealers exist, necessitating caution.
  • Determining gold purity on your own can be challenging.
  • Gold dealers often charge a markup, potentially exceeding 10% of the gold’s value.

How to Buy Physical Gold

Numerous online retailers offer a variety of gold coins, rounds, and bars. Expect prices above the current spot price due to seller markups. Discounts may apply for military members or bulk purchases, typically exceeding 100 gold bars or 500 gold coins, depending on the seller.

Smaller gold bars (ranging from half a gram to 100 grams) are available at numismatic specialty stores, pawn shops, or select jewelry stores.

Where to Buy Gold Bars:

For detailed guidance on purchasing gold bars, refer to our comprehensive guide. Well-established dealers offering gold bars include:

  • JM Bullion
  • Provident Metals
  • Westminster Mint
  • Money Metals Exchange

Where to Buy Gold Coins:

Several governments and private mints produce gold coins. Some renowned government mints include:

  • The United States Mint
  • The Royal Canadian Mint
  • The Perth Mint in Australia
  • The Royal Mint of the United Kingdom
  • The Central Mint of the People’s Bank of China

Well-known private mints:

  • Valcambi
  • PAMP Suisse
  • Austrian Mint
  • New Zealand Mint
  • Sunshine Minting
  • South African Mint
  • Geiger Edelmetalle

Although coins issued by the U.S. Mint possess legal tender status, their market value often far exceeds their face value. Collectible coins may command higher prices due to rarity or increased demand.

Popular minted coins:

  • Gold Buffalo
  • American Eagle
  • British Sovereign
  • Australian Kangaroo
  • Vienna Philharmonic
  • Canadian Maple Leaf
  • South African Krugerrand
  • Mexican Gold 50 Pesos
Related:  Why Invest in Gold? (Top 8 Reasons)

Gold bullion coins can be acquired from mints, coin shops, online dealers, eBay, or coin shows.

Where to Buy Gold Jewelry:

When purchasing gold jewelry, consider that the price is influenced by craftsmanship, and the gold content represents only a portion (karat) of the overall weight.

Common gold alloys for jewelry include 14K (58.3% pure gold), 18K, and 22K, while 24K gold (99.95% pure) is less common due to its softness.

Ethically sourced jewelry may bear labels like “ethical” or “sustainable,” such as Fairmined jewelry with its associated stamp, signifying responsible mining practices.

Investing in Non-Physical Gold

If acquiring physical gold doesn’t align with your investment strategy, you can explore various gold-backed securities. These investment opportunities are accessible through brokerage accounts, online trading platforms, or gold IRAs.

Here are some examples of how to invest in gold without owning the physical metal:

  • Gold ETFs: Consider options like the VanEck Gold Miners ETF.
  • Gold Mutual Funds: Explore choices such as the Fidelity Select Gold Portfolio Fund.
  • Gold Mining and Refining Stocks: Companies like Newmont Corp. and Barrick Gold Corp. offer stocks.
  • Gold Futures Contracts: Utilize exchanges like the Chicago Mercantile Exchange.

☞ Is Gold a Good Investment?

Pros & Cons


  • Gold is a tangible asset that offers high liquidity, ensuring easy and quick selling if necessary.
  • Historically, gold has been a reliable hedge against inflation, maintaining pace with the cost of living.
  • Gold serves as a diversification tool for investment portfolios, tending to perform well when other asset classes, such as stocks and real estate, face declines.


  • Gold doesn’t generate income like bonds or dividend-paying stocks, potentially leading to lower long-term returns.
  • Gold prices can experience volatility.
  • There are associated costs in buying, selling, and holding gold as an investment.


Gold ownership can enhance investment portfolio diversification and act as a safeguard against inflation. However, as with any investment, there are inherent risks. Gold may display short-term volatility and could lag behind stocks regarding long-term price appreciation.

Prior to acquiring physical gold or investing in gold-backed securities, ensure they align with your investment strategy, financial objectives, and risk tolerance.


Diversification, involving the ownership of a mix of various assets, aims to shield investors from significant losses. In a well-diversified portfolio, declines in one investment type may be offset by the performance of others, reducing overall risk.

Gold often exhibits an inverse relationship with stock and bond prices, potentially rallying during market turmoil when investors seek refuge from stocks. For instance, when the S&P 500 plummeted approximately 30% from November 2008 to March 2009, gold prices surged by a similar percentage.

However, this correlation doesn’t always hold. During the broad market pullback in 2022, with the S&P 500 declining by 19%, gold prices also dipped, albeit slightly. By year’s end, gold had only decreased by -0.1%, outperforming many other asset classes.

Related:  These Are the 7 Best Gold ETFs (With Low Costs)

Incorporating some gold alongside stocks and bonds can contribute to portfolio diversification. However, financial advisors typically recommend allocating no more than about 10% of your total assets to gold or precious metals in general.

Ethical Considerations

Increasingly, investors seek investments aligned with their values, paralleling the rise of environmental, social, and governance (ESG) investing. Gold mining can have substantial environmental and ethical impacts.

Mining practices have raised concerns about labor conditions and human rights, especially in conflict-affected and impoverished regions where many gold mines operate.

In response, the World Gold Council and the International Council on Mining and Metals implemented guidelines for member companies, requiring them to publicly disclose progress.

This transparency empowers consumers and investors to make informed choices aligned with their ethical considerations.

☞ How to Buy Gold FAQ

What is the price of gold?

The price of gold experiences daily fluctuations, with an all-time high recorded in May 2023. These price shifts result from various factors, including the monetary policies of central banks worldwide, the strength of the U.S. dollar, and overall market conditions.

In the United States, the COMEX serves as the primary exchange for gold futures and sets the most widely quoted gold prices. Additionally, the London Bullion Market Association establishes a twice-daily fixed gold price, which serves as a benchmark for major market participants.

Generally, you should keep an eye on the “spot price” of gold. This represents the price at which gold can be bought or sold on a given day, as opposed to a future date.

Should I invest in gold?

Gold serves as a hedge against inflation and a valuable portfolio diversification tool. Its high liquidity ensures you can easily find a buyer when you decide to sell.

However, it’s essential to manage your expectations regarding returns from gold compared to other asset classes like stocks. While gold is a stable investment, it is likely to be outperformed by securities in the long term.

Where can I buy gold?

You have several options for acquiring gold:

  • Physical Gold: Dealers like JM Bullion and APMEX, as well as pawnshops and jewelry stores, offer physical gold. Be cautious when buying from jewelry stores or pawnshops, as the gold may have a lower karat.
  • Gold-Backed Securities: Invest in gold-backed securities, such as gold-leveraged ETFs, mutual funds, gold mining stocks, and gold futures, through a brokerage or online trading platform.

Should I pay taxes on gold?

Taxation on gold depends on the type of gold investment:

  • Securities: Profits from trading securities like stocks, ETFs, mutual funds, and bonds are considered capital gains. These gains are subject to special long-term and short-term capital gains tax rates, ranging from 10% to 37% for short-term and 0%, 15%, or 20% for long-term, based on your taxable income. An exception exists for ETFs backed by physical gold, which are taxed as collectibles, not capital gains.
  • Physical Gold: The IRS treats profits from trading physical gold and other collectibles differently. If you own physical gold for less than one year, gains are taxed as ordinary income. If you hold physical gold for more than one year, gains are subject to a maximum tax rate of 28%.

☞ Final thoughts

Investing in gold is often seen as a strategy to safeguard against inflation and preserve wealth over time. It also provides an avenue for diversifying your investment portfolio. However, it’s essential to weigh the associated risks before incorporating gold into your financial strategy.

Financial experts typically advise allocating no more than 10% of your total portfolio to gold. While gold maintains relative stability, unlike speculative assets like cryptocurrencies, it primarily serves as a safe haven, offering protection to investors.

However, because it doesn’t generate income, gold is less likely to yield substantial returns compared to asset classes such as stocks and real estate.

If you determine that gold aligns with your investment objectives, you have the option to acquire the physical metal, including gold bullion, ingots, bars, coins, or rounds. Alternatively, you can opt for gold-backed securities like stocks, ETFs, mutual funds, or futures.

⬇️ More from ⬇️

Pavlos Written by:

Hey β€” It’s Pavlos. Just another human sharing my thoughts on all things money. Nothing more, nothing less.