How to Choose the Most Cost-Effective Among the Five Major Gold Investment Channels? A Complete Analysis of Risks, Costs, and Benefits

Why Should You Pay Attention to Gold Investment Now?

Gold is highly regarded for a reason. When geopolitical tensions escalate or inflation heats up, this traditional safe-haven asset often plays a stabilizing role in investment portfolios.

From market performance, gold has the characteristics of a global investment market and anti-inflation properties, and during market turbulence, it is often seen as a “safe harbor.” Institutional investors generally recommend allocating at least 10% of their portfolios to gold. This is not because gold provides fixed income, but because it offers a sense of security—its stability becomes an important psychological anchor in the face of economic uncertainty and financial crises.

Whenever inflation or market volatility intensifies, investor enthusiasm for gold surges. In recent years, after the Russia-Ukraine war broke out in February 2022, gold prices soared to $2,069; entering 2024, gold prices have broken through historical highs, reaching over $3,700 by September 2025, with Goldman Sachs even projecting a target of $4,000 per ounce by mid-2026.

Why Are Gold Prices Rising So Rapidly? The Driving Forces Behind It

Between 2022 and 2023, gold prices experienced significant fluctuations, with highs exceeding $2,000 and lows dropping below $1,700, mainly influenced by geopolitical conflicts and Federal Reserve rate hikes.

In 2024, multiple factors drove the rebound in gold prices: expectations of interest rate cuts in the US became a major driver, geopolitical risks increased support, and more importantly, global central banks set records in gold purchases—net purchases reached 1,045 tons in 2024, exceeding 1,000 tons for three consecutive years, directly supporting gold prices to break through $2,700.

However, investors should be aware that many factors influence gold prices, and short-term trends are difficult to predict precisely. If the goal is long-term appreciation, the focus should be on finding good entry points rather than buying after prices have risen.

How to Buy Gold Most Cost-Effectively? Clarify Your Investment Goals First

Different investment goals determine where you should buy gold:

Long-term preservation and appreciation: If the goal is to hedge against inflation and preserve or grow wealth, consider physical gold, gold savings accounts, or gold ETFs. These methods are relatively stable and suitable for patient holding.

Short-term profit from price fluctuations: If you want to profit from market volatility and can bear market risks, gold futures and gold CFDs are more effective tools. Both track international gold prices; by analyzing price trends, you can profit from going long or short.

Five Ways to Invest in Gold: A Comprehensive Comparison

In-Depth Analysis of Each Investment Method

1. Physical Gold: Tangible Asset Security

Purchasing gold bars, ingots, or commemorative coins mainly occurs at banks and jewelry stores. The core advantage of physical gold is low risk and straightforward buying and selling, but the costs are not low.

Physical gold has some obvious drawbacks: firstly, it is not an income-generating asset and cannot provide cash flow like bonds or stocks; secondly, it requires proper safekeeping, which may incur safe deposit box rental fees; finally, liquidity is poor, with the dilemma of “easy to buy, hard to sell.”

From a tax perspective, if transactions exceed NT$50,000, personal one-time trading income must be declared, with a profit rate of 6% included in the following year’s comprehensive income tax.

Recommended strategy: For large quantities, buy directly from banks for safety and security, but prepare for storage costs; for smaller quantities, purchase at jewelry stores, ensuring purity.

2. Gold Savings Account: The Convenient Paper Gold Option

Gold savings accounts (also called “paper gold”) allow investors to buy and sell without physically holding gold, simply through bank account records. This greatly reduces storage costs and liquidity issues.

Many large banks in Taiwan offer this service, including Bank of Taiwan, CTBC Bank, First Commercial Bank, and Hua Nan Bank. Gold savings accounts can even be exchanged for physical gold.

Main trading methods include NT dollar purchases, foreign currency purchases, and the newly launched dual-currency gold savings accounts (launched by Bank of Taiwan in April 2023, allowing investors to benefit from both NT dollar and foreign exchange rate movements).

Using NT dollars involves exchange rate risk (since international gold prices are quoted in USD); foreign currency purchases incur currency conversion costs. Overall, it has moderate friction costs, but frequent trading can accumulate higher fees, so a low-frequency strategy is recommended.

Tax-wise, gains from buying and selling are considered property transactions and must be included in the following year’s individual comprehensive income tax. Losses can be deducted, and any remaining deductible amount can be carried forward for three years.

Where is the best place to buy gold savings accounts? Recommended banks include Bank of Taiwan, E.SUN Bank, and E.SUN Bank, each offering competitive services.

3. Gold ETF: Easy Investment via Funds

Gold ETFs (Gold Index Funds) offer a more flexible investment approach. Options include Taiwan Stock Exchange Gold ETF (00635U), US gold ETFs (GLD, IAU), etc.

Cost structures vary among ETFs:

• Taiwan Gold ETF: management fee 1.15%/year + transaction fee 0.15% + stamp tax 0.1%
• US ETF (GLD): management fee 0.4%/year + transaction fee 0~0.1% + currency exchange 0.32%
• US ETF (IAU): management fee 0.25%/year + transaction fee 0~0.1% + currency exchange 0.32%

Features of gold ETFs include low entry barriers and good liquidity, but only long positions are possible—no shorting. Suitable for beginners and retail investors for long-term allocation.

Where to buy gold ETFs? For Taiwan ETFs, use domestic brokers; for US ETFs, open a US brokerage account. Costs are relatively low, but currency exchange is required.

4. Gold Futures: Efficient Dual-Position Trading

Gold futures are based on international gold prices. Investors’ profits or losses depend on the price difference between entry and exit.

Main advantages include dual-direction trading, long trading hours, and lower holding costs. Using margin, investors can leverage to amplify gains, making it especially suitable for short-term and swing trading. Gold futures prices are linked 24/7 with international markets, making manipulation difficult.

However, futures also carry risks: fixed expiration dates require rollover, and positions not closed before expiry are forcibly settled; holding positions in the delivery month without offsetting will lead to forced liquidation; leverage amplifies both gains and losses, requiring strict capital management.

Tax-wise, trading income from futures is exempt from tax, with only a 0.0000025 (25 ten-thousandths of a percent) futures transaction tax.

Trading venues: Taiwan futures are traded on the Taiwan Futures Exchange with shorter trading hours; many overseas brokers offer nearly 24-hour trading with better liquidity and volume, often with Chinese support.

5. Gold CFD: The Lowest-Cost Entry Method

CFDs (Contracts for Difference) track spot gold prices as the underlying. Investors do not hold physical gold and have no expiration date, making it more flexible than futures.

Advantages of CFDs are clear: lowest entry barrier, flexible leverage options, no fixed contract size. Trading gold CFDs is straightforward—no need for stock analysis, just judge the gold price direction. Profits come from the price difference of buy/sell contracts, with fees mainly from spreads and overnight financing.

Tax-wise, profits from overseas gold CFDs are considered overseas income, and if exceeding NT$1 million annually, must be included in personal basic income and taxed under the minimum tax system.

Core differences between futures and CFDs:

• CFDs have no fixed contract size or expiration date, futures do
• CFDs have no trading fees, futures do
• CFDs require less capital
• Both support dual-direction trading and leverage

Where to buy gold CFDs? CFDs are traded globally; currently, Taiwan has no legitimate exchange. When choosing a broker, ensure it is regulated by reputable international financial authorities to avoid scams.

Summary: Choose the Right Gold Investment Method Based on Your Goals

Long-term preservation and appreciation: Physical gold, gold savings accounts, or gold ETFs are main options, with stable costs and manageable risks.

Short-term profit: Futures and CFDs are more advantageous but require market analysis skills and risk tolerance.

Key reminder: Regardless of the method chosen, focus on good entry points rather than chasing prices. Long-term strategies require patience, while short-term trading demands discipline. Always prioritize risk management; leverage tools can amplify both gains and losses. Beginners are advised to start with no leverage or low leverage to build experience.