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Gold is a relatively stable investment that doesn’t experience the same degree of volatility as stocks and other tradable assets. If you are looking to hedge against large drops in the market, you may want to consider investing in gold as a way to protect your wealth. Here’s what you need to know and how to start investing in gold.
Buying and storing physical gold allows you to get your hands on a tangible asset and avoid the risks associated with the stock market. You can buy gold bullion in the form of gold bars or in coins:
Bars and rounds: Gold bars and rounds can come in a range of sizes, from a half gram to several ounces, and typically offer lower premiums and higher purity.
Coins: Because of their intricate designs and production costs, historical or sentimental value and collectibility, gold coins typically come with a higher premium compared to bullion bars or rounds.
At most institutions, there is a limit to how much gold you can purchase daily. For instance, most banks have a daily limit of around $10,000 worth of gold, but this can vary. Whether you are a customer may also influence your daily purchase limit and even purchase price.
Retirement-minded investors may consider gold IRAs for their bullion investing. These types of self-directed IRAs let you invest in physical gold and other precious metals through a tax-advantaged retirement account.
Buy gold bars
Gold bars generally range in size from 1/10oz (ounces) to 1kg, but bars of up to 500oz are available. Remember that precious metals use troy ounces and that one troy ounce equals 31.1 grams.
There are two types of gold bars: cast bars and minted bars. Cast bars are produced by pouring molten gold into an ingot mold, while minted gold bars are manufactured via a minting or stamping process.
Cast bars are cheaper to produce, but minted bars look better and are generally easier to sell.
Buy gold coins
Mints around the world also produce gold bullion coins. Typically smaller than bars and ingots, they’re generally considered to be a more convenient option for many investors.
Not only are they cheaper to buy, but they also make it easier to liquidate a small portion of your investment when you need cash. Coins contain between 1/20oz and 1oz of pure gold. A 1/20oz coin with cost you less than $200, making it a more cost-effective way to gain exposure.
These coins also have a nominal monetary value and can be accepted as legal tender in the country where they’re made – examples include the Australian Kangaroo, the American Gold Eagle, the Canadian Maple Leaf and the UK’s Gold Sovereign.
Buy gold bullion from these dealers
Gold bullion refers to gold that is at least 99.5% pure and has been transformed into bars or ingots or minted into coins. Gold bullion is the form in which gold is traded on commodities markets worldwide.
Guarantees to buy back your precious metals at the highest price
2. Buy gold stocks, ETFs and futures
Investors who don’t want to take delivery of physical gold or pay to store it in a third-party vault may decide to buy shares in gold stocks or ETFs. Gold stocks and ETFs typically comprise the following:
Gold mining companies. These companies specialize in the exploration, mining and selling of physical gold. Mining stocks allow you to directly link your capital to the success of these mines and the changing value and price of gold. Many offer the added benefit of dividends.
Gold-focused ETFs. These funds invest in gold mining companies, physical gold or both, giving investors access to a wide array of assets through a single investment.
Gold royalty and streaming companies. These companies provide mining companies with capital to expand or develop their projects and, in return, receive a percentage of the mine’s revenue or gold production.
Meanwhile, gold futures let investors speculate on the future price of gold. In general, futures are exchange-traded contracts that obligate a buyer to purchase and receive a predetermined amount of the underlying asset at a future price and date. While companies can use gold futures to lock in gold prices on an expected future purchase or sale, investors may trade gold futures as a way to speculate on the future price of gold without taking physical delivery of the asset. Examples of brokers that offer futures trading include TD Ameritrade, Interactive Brokers and tastytrade.
How to buy gold stocks
Open an investment account. Compare brokers that offer stocks, ETFs and futures. Also, decide whether to invest via a taxable brokerage account or an individual retirement account (IRA). Before choosing a broker, consider things like features, trading costs and account fees.
Research and choose an asset. Decide whether to invest in stocks or ETFs of gold mining companies or gold royalty and streaming companies or if you want to trade gold futures. Not all brokers offer futures trading, so be sure to compare brokers by investment options.
Fund your account. Link your bank to fund your trading account.
Make your investment. Buy your desired number of shares or invest a dollar amount if your brokerage of choice offers fractional shares.
Compare brokers to buy gold stocks or ETFs
Compare minimum deposits, fees and signup bonuses among top trading platforms.
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What is the price of gold right now?
The graph below tracks the spot price of gold, which is the current marketplace price per ounce of gold.
Factors that affect gold pricing
There are numerous pricing factors to consider and compare before selecting your gold.
Spot price. This industry standard represents the up-to-date rate for one ounce of gold. The spot price of gold fluctuates constantly and is determined by the forward month’s futures contract with the most volume.
Markup. Gold markups help retailers cover costs and can range from 2% to 30% on top of the gold’s spot price. The retailer may express this cost as a commission or service fee.
Premium. Some gold has additional collector’s value, and some issuers of gold — like the US Mint — command a higher premium than others.
Market factors. The price of gold can be affected by a variety of market factors, including economic conditions, geopolitical events and more.
Top gold stocks and ETFs for 2023
Here are some of the top gold stocks and ETFs for 2023. Information is accurate as of July 2023.
Colorado-based Newmont is the world’s largest gold mining company based on production and market cap and the only gold producer included in the S&P 500 index. The company operates mines in North America, South America, Australia and Africa and holds reserves of over 96 million gold ounces as of the end of 2022. Most recently, Newmont’s Coffee Gold Project — a proposed open-pit and heap leaching gold development project located in west-central Yukon — was approved by Canadian federal and territorial governments. The proposed mine will be capable of producing roughly 67 million tons of ore over the project’s lifecycle, according to the CBC.
Price: $42.24 as of market close July 7, 2023*
52-week range: $37.45 to $59.53*
Performance YTD: -14.8%*
Dividend yield: 3.79%*
Analysts’ opinion: 2 Strong Buys, 9 Buys and 7 Holds*
Franco-Nevada is a leading gold-focused royalty and streaming company. In the third quarter of 2022, precious metal revenue accounted for 76.8% of the company’s revenue, of which 62.3% was from gold.
Headquartered in Canada, Franco-Nevada provides investors with dividends and exposure to gold price and exploration optionality. The company’s portfolio comprises 419 assets covering roughly 66,000 square kilometers, primarily throughout North America, South America, Africa and Australia. While Franco-Nevada doesn’t perform mining operations, it receives revenue through various agreements. These include: net smelter return royalties, streams, net profit interests, net royalty interests and working interests.
The SPDR Gold Shares ETF is the largest physically backed gold ETF globally, with over $56 billion in assets under management. It aims to track the performance of gold bullion and had over 29.5 million ounces of vaulted gold in its custody as of December 31, 2022. The fund has been operating since 2004.
A safe haven investment is typically stable in times of market volatility. A safe haven is also useful for investors looking to diversify their portfolio, decreasing exposure to riskier assets or investments. Investors view gold as a safe haven for several reasons:
Gold is a physical asset.
It’s not easily created or destroyed.
It doesn’t change — gold is resistant to oxidation and will look the same in hundreds of years.
It has cultural and historical value — gold predates modern currency and has always been seen as beautiful and special.
Governments have turned to gold in times of financial crisis, which adds to gold’s stability.
Bottom line
If you’re searching for ways to protect your wealth or diversify your investments, gold bullion, stocks and ETFs may be a practical addition to your portfolio. These securities provide a means to add gold exposure to your portfolio, either through physical acquisition or exposure through the stock market. Regardless of how you choose to invest in gold, remember that, like all investments, it carries risk.
How to buy gold FAQs
Once you've purchased your gold, you'll also need to find a safe place to store it. There are several options to consider, including the following:
Bullion dealers. Many gold dealers will also offer a storage service where you can keep your gold bars or coins for a fee, so ask about the storage options available when you make your purchase.
Safety deposit boxes. You can rent a safety deposit box at a bank to securely store your gold bullion.
Secure vault storage. For high-level security, research vault storage companies near you and their storage options.
At home. You can also choose to store your gold at home. This obviously may not be as secure as some other options, so you may want to get a home safe installed. You'll also need to update your home and contents insurance to make sure your precious metal is covered by your policy (learn more about home insurance in our detailed guide).
Yes, it is safe to buy gold online, provided you're purchasing from a reputable gold dealer. Before deciding whether to buy, thoroughly research the legitimacy of any dealer by checking to see how long they've been in operation and whether they've been flagged for any breach of compliance.
Aside from buying gold as a physical commodity, there are a couple of other ways you can potentially make money from gold. For example, it's possible to invest in exchange-traded funds that track the price of gold or invest in gold mining companies. Of course, these options also come with a certain level of risk attached, and there's no guarantee of making a profit.
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Here’s what happens to your securities if your brokerage fails, and how your assets are protected by SIPC and FDIC.
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Several ETFs have exposure to Silicon Valley Bank, but it appears minimal.
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Treasury Bills are fixed-income assets with maturities of less than one year. Here’s what to know before investing.
Matt Miczulski is an investments editor at Finder. With over 450 bylines, Matt dissects and reviews brokers and investing platforms to expose perks and pain points, explores investment products and concepts and covers market news, making investing more accessible and helping readers to make informed financial decisions.
Before joining Finder in 2021, Matt covered everything from finance news and banking to debt and travel for FinanceBuzz. His expertise and analysis on investing and other financial topics has been featured on CBS, MSN, Best Company and Consolidated Credit, among others. Matt holds a BA in history from William Paterson University.
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