Where is the best place to buy gold? Analysis of the advantages and disadvantages of the five major investment channels

International instability and persistent inflation continue to rise, prompting more investors to focus on gold as a traditional safe-haven asset. However, there are many ways to invest in gold. Where is the best place to buy gold for value? This article provides an in-depth look at five gold investment channels, analyzing their respective risks, costs, and return characteristics to help you choose the most suitable method based on your investment goals and style.

Is Gold Worth Investing? Current Trend Analysis

Review of Gold Price Movements:

Gold experienced significant volatility from 2022 to 2023, dropping from over $2000 to below $1700, mainly due to geopolitical conflicts and Federal Reserve rate hikes. But starting in 2024, gold prices reversed their downward trend, reaching new all-time highs, and in September 2025, breaking through $3700. The driving forces include expectations of US rate cuts, escalating geopolitical risks, and record-breaking central bank gold purchases worldwide. Data shows that global central banks net purchased 1,045 tons of gold in 2024 (over a thousand tons for three consecutive years), supporting the upward trend in gold prices.

Short-term Risks vs. Long-term Opportunities:

While short-term gold price movements are hard to predict, the key to long-term investment is finding the right entry point. If your strategy is to hold long-term for appreciation, consider low-cost tools like physical gold, gold savings accounts, or gold ETFs. If you’re willing to tolerate market volatility for higher returns, derivatives like gold futures and CFDs may be more suitable, but they require market analysis skills and disciplined capital management.

Comparison Table of the Five Major Gold Investment Channels

Where to Buy Gold? Detailed Explanation of Five Channels

1. Physical Gold: Traditional and Secure but Limited Liquidity

Physical gold includes bars, ingots, jewelry, and commemorative coins, usually purchased at banks or jewelry stores. For investment purposes, it’s recommended to buy gold bars rather than jewelry or coins, as the latter include processing fees and incur handling and wear-and-tear costs upon resale, resulting in less favorable buy-back prices.

Investment Features: Physical gold is inherently a non-yielding asset, requiring special storage costs (like safe deposit box fees). Liquidity is relatively poor, with a “hard to sell” situation. However, because investors can hold tangible gold, many are willing to pay a premium for its preservation and collectible value.

Advantages of Buying Gold Bars at Taiwanese Banks: Taiwan Bank is the only bank in Taiwan with physical gold trading services, offering guaranteed quality and low processing fees. The main specifications start from 100 grams, including 250g, 500g, and 1kg options. For smaller amounts, consider jewelry stores or pawnshops, but always verify purity, as buy-back is based on weight. Avoid purchasing illusionary gold bars with large bargaining gaps.

Tax Considerations: Transactions exceeding NT$50,000 must be declared as personal occasional trade income. Assuming a 6% profit rate, this income is included in next year’s comprehensive income tax return.

Suitable for: Long-term collectors, asset preservation, those seeking physical possession and security

2. Gold Savings Account: Convenient for Small Investments

Gold savings accounts, also called “paper gold,” are managed by banks that hold the gold on behalf of investors. Investors only record buy/sell transactions via the account without holding physical gold. Many major banks offer this service, such as Taiwan Bank, CTBC Bank, First Commercial Bank, and Hua Nan Bank. Gold savings accounts can also be exchanged for physical gold.

Three Purchase Options:

• TWD purchase: Convenient but exposes exchange rate risk (since international gold prices are quoted in USD)
• Foreign currency purchase: Avoids exchange rate risk but incurs currency conversion costs
• Dual-currency gold savings account: Gains from both exchange rate and gold price fluctuations

Overall, the three methods have similar costs, with moderate friction. Frequent trading will accumulate transaction and currency exchange fees, so low-frequency trading is recommended.

Tax Treatment: Profits from gold savings account transactions are considered property trading income, reported in the following year’s individual comprehensive income tax. Losses can be deducted from property trading income; any remaining loss can be carried forward for up to 3 years.

Suitable for: Long-term investors with low costs, those wanting to avoid physical storage hassle, low-frequency traders

3. Gold ETF: Best Liquidity for Index Investment

Gold ETFs are index funds based on gold, including Taiwan stock gold ETFs and US stock gold ETFs. Investors can trade directly through brokerage accounts, with low barriers and high liquidity.

Cost Comparison:

• Taiwan Gold ETF: Management fee 1.15%/year + commission 0.15% + transaction tax 0.1%
• US Gold ETF(e.g., GLD): Management fee 0.4%/year + commission 0~0.1% + currency conversion 0.32%
• US Gold ETF(e.g., IAU): Management fee 0.25%/year + commission 0~0.1% + currency conversion 0.32%

US ETFs like GLD have lower management fees, offering cost advantages over the long term.

Investment Features: Gold ETFs can only be bought long, not shorted, suitable for those optimistic about long-term gold appreciation. Compared to futures and CFDs, they carry lower risk and are more suitable for beginners and retail investors.

Suitable for: Long-term low-cost investors, high liquidity seekers, risk-averse asset allocators

4. Gold Futures: Advanced Short-term Trading

Gold futures are contracts based on international gold prices, with profits or losses depending on the price difference at entry and exit. Futures support both long and short positions, with lower holding costs but fixed expiration dates.

Trading Features: Investors only need to deposit a margin, leveraging their capital. Prices are linked 24/7 to international markets, making manipulation difficult. However, leverage is a double-edged sword: it amplifies gains but also losses.

Costs and Roll-over Risks: Futures incur costs when rolling over positions; if not closed before expiration, they are forcibly settled. Transaction tax is very low at 0.0000025 (25 millionths).

Trading Hours: Taiwan futures trading hours are shorter, while overseas brokers’ gold futures are nearly 24/7, offering greater liquidity and flexibility.

Suitable for: Short-term traders, swing traders, investors with larger capital, experienced derivatives traders

5. Gold CFDs: The Lowest Cost Flexible Tool

Gold CFDs are contracts tracking the spot gold price, allowing traders to profit from price differences without holding physical gold or having expiration dates, making them more flexible than futures.

Core Advantages:

• Very low entry barriers, flexible leverage
• Support for both long and short positions, T+0 trading around the clock
• Main costs are spreads and overnight financing fees
• Simple trading logic, no need to select stocks, just analyze gold price trends

Futures vs. CFDs:

• Minimum contract size: Futures are fixed, CFDs are flexible (with lower margin requirements)
• Expiration: Futures have fixed expiry dates, CFDs are unlimited
• Fees: Futures have transaction taxes, CFDs do not
• Capital requirement: CFDs generally require less capital

Taxation: Profits from international gold trading are considered overseas income. If annual income exceeds NT$1 million, it must be included in the individual’s basic income tax calculation, subject to minimum tax.

Suitable for: Small-scale short-term traders, swing traders, skilled traders, investors with strong capital management awareness

The True Value of Gold Investment: Why Do Institutions Allocate Gold?

Gold’s popularity is not because it offers high returns, but because of its unique hedging properties:

Core Advantages of Gold:

• Value Preservation: Historically effective against inflation and currency depreciation
• Global Market: Large trading volume and mature market
• Safe-Haven Asset: Provides psychological security during turbulence
• Rapid Response: Quickly reflects systemic risk events

Investment institutions generally recommend allocating at least 10% of the total portfolio to gold. Although more volatile than fixed deposits and not offering fixed income, nor unlimited growth like stocks, gold provides a safeguard against uncertainty and financial crises.

Market Examples: After the Russia-Ukraine conflict (February 2022), gold prices surged to 2069 USD; recently, international gold hit new highs, breaking through 3700 USD. These trends confirm gold’s role as a “smart money” asset.

Dual Role of Gold: Because the gold market is mature and highly responsive, investors can use it both as a long-term hedge (buy-and-hold) and as a short-term trading opportunity to profit from price swings. The choice depends on your risk tolerance and investment goals.

Summary: Where to Buy Gold — The Key Is Clear Goals

Whether you aim to preserve assets through physical gold or seek short-term gains via derivatives, the crucial factor is selecting the right investment channel based on your objectives. Long-term investors should focus on cost and convenience, while short-term traders should prioritize liquidity and operational flexibility. In this era of record-high gold prices, understanding various investment methods early will enable you to make wise decisions when opportunities arise.