Five Major Comparisons of Gold Investment Channels: Where Is the Most Cost-Effective and Cheapest to Buy?

Gold Price Trends and Investment Timing

In recent years, the international gold market has experienced significant volatility. Between 2022 and 2023, gold prices fluctuated sharply between $1,700 and $2,000, mainly influenced by geopolitical conflicts and Federal Reserve interest rate hikes. Entering 2024, multiple factors are driving gold prices higher, including rising expectations of U.S. rate cuts, escalating geopolitical risks, and record-breaking central bank gold purchases worldwide. According to statistics, global central banks’ net gold purchases in 2024 reached 1,045 tons, surpassing the 1,000-ton mark for three consecutive years, directly supporting gold prices to break through $2,700. As of September 2025, international gold prices have exceeded $3,700, with Goldman Sachs predicting it will reach $4,000 per ounce by mid-2026.

However, it is important to note that the factors affecting gold prices are complex and variable, making short-term trends difficult to predict accurately. For long-term investors, the focus should be on finding suitable entry points rather than waiting for price increases before considering entry. For short-term traders, if willing to bear market risks and possess technical analysis skills, profits can be made through price differentials using technical analysis.

Five Gold Investment Methods Fully Compared

Based on investment goals and risk tolerance, gold investments are mainly divided into five types. Physical gold is suitable for long-term preservation and hedging; gold savings accounts and gold ETFs are suitable for investors with moderate risk appetite; gold futures and Contracts for Difference (CFDs) target short-term trading and swing operations.

Physical Gold: Traditional Preservation Tool

Physical gold includes bars, ingots, and commemorative coins, usually purchased at banks and jewelry stores. Buying gold bars is the best choice, but caution should be exercised with gold jewelry and commemorative coins, as these products include processing fees and may incur high handling and wear-and-tear costs when sold.

While physical gold has low risk, it is not an ideal investment because it does not generate income, requires storage costs and insurance, and has lower liquidity, making it easy to buy but difficult to sell. However, since it can be held physically, many investors still use it as a long-term preservation and collection tool.

Tax Considerations: Transactions involving physical gold exceeding NT$50,000 must be reported as personal occasional trade income, taxed at a 6% profit rate.

Suitable For: Collectors, low-risk hedging investors

Gold Bar Purchase Locations: Taiwan Bank is the only bank nationwide offering physical gold trading, with gold bar specifications ranging from 100 grams to 1 kilogram. Small grams gold can be purchased at jewelry stores or pawnshops, but the key is to verify purity.

Gold Savings Account: The Convenient “Paper Gold” Option

Gold savings accounts, also called “paper gold,” allow investors to avoid holding physical gold, with the bank acting as custodian. Compared to gold bars, gold savings accounts are more convenient, and many large banks such as Taiwan Bank, CTBC Bank, First Commercial Bank, and Hua Nan Bank offer this service.

There are three ways to buy and sell gold savings accounts: NT dollar purchase, foreign currency purchase, and dual-currency gold savings accounts (launched by Taiwan Bank in April 2023). NT dollar purchases face exchange rate risk; foreign currency purchases involve currency exchange costs. Overall, these have moderate friction costs. Frequent trading can accumulate higher fees, so a low-frequency trading strategy is recommended.

Tax Considerations: Gains from buying and selling are considered property transaction income and should be included in the following year’s comprehensive income tax declaration. Losses can be deducted from property transaction income, with unused losses carried forward for three years.

Suitable For: Investors seeking low-cost, low-frequency trading

Recommended Banks: Taiwan Bank, E.SUN Bank, E.SUN Bank

Gold ETF: An Option for Small-Scale Entry

Gold ETFs refer to gold index funds. Since they are funds, management fees are involved. There are gold ETFs available in Taiwan and abroad, such as Taiwan Stock Exchange Gold ETF (00635U), US gold ETFs (GLD), and IAU.

Trading costs for various gold ETFs:

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

Gold ETFs have low investment thresholds and high liquidity but can only go long, not short, making them suitable for beginners and retail investors for long-term investment.

Suitable For: Investors seeking convenience and low cost for long-term holdings

Purchase Methods: Via Taiwanese brokers for Taiwan ETFs or through overseas brokers for US ETFs

Gold Futures: Leverage Trading Tools

Gold futures are based on international gold prices, with profits or losses depending on the price difference at entry and exit. Futures support two-way trading, allowing 24-hour long and short operations, with only a margin deposit required to leverage trading.

Advantages include long trading hours, lower holding costs, prices linked to international markets, and difficulty of manipulation. Disadvantages include expiration dates, forced liquidation risks, leverage amplifying losses, and costs associated with rolling over positions.

Tax Considerations: Gold futures trading income tax has been suspended; only a futures transaction tax of 0.0000025 (25 per million) applies.

Trading Hours: Taiwan Futures Exchange has shorter trading hours; overseas futures brokers offer nearly 24-hour trading.

Suitable For: Short-term traders, swing investors, professional investors with larger capital

Gold CFDs: The Lowest Cost Entry

CFDs (Contracts for Difference) track the spot gold price, support two-way trading, and do not require actual gold ownership or expiration dates, making them more flexible than futures. Profits come from the price difference of the contract, with very low entry barriers and flexible leverage options.

Advantages of trading gold CFDs include not needing to select stocks—only analyzing gold price trends; disadvantages include high leverage risk and the need for trading skills.

Key Differences Between Futures and CFDs:

• Futures have fixed minimum contract sizes; CFDs do not, with lower margin requirements
• Futures have expiration dates; CFDs do not
• Futures involve trading fees and taxes; CFDs are simplified
• Futures require higher capital

Tax Considerations: Income from overseas gold trading is considered foreign income. If annual income exceeds NT$1 million, it must be included in personal basic income calculations.

Suitable For: Short-term traders, swing investors, small-capital investors

Choosing a Broker: Many international forex platforms offer gold CFDs. When selecting, ensure the broker is regulated by reputable international financial authorities to avoid scams.

How to Choose the Most Cost-Effective Gold Investment Method?

Where is gold cheaper? The answer depends on your investment strategy and goals.

For Long-Term Preservation Investors: Choose physical gold, gold savings accounts, or gold ETFs. Large gold bars are recommended to buy directly from banks for safety, though storage fees apply; small grams gold can be purchased at jewelry stores, just ensure high purity. Gold savings accounts and ETFs have lower costs, but frequent trading can accumulate fees.

For Short-Term Swing Traders: Focus on gold futures and CFDs. Both track international gold prices, and with technical analysis, you can profit from long and short positions. CFDs have lower entry barriers and more flexible leverage, making them more suitable for small-capital investors.

Cost Comparison Summary: Physical gold has a single transaction cost of 1%~5%, gold savings accounts 1.00%, gold ETFs 0.25%, gold futures 0.10%, and gold CFDs 0.04%. If minimizing costs is the priority, CFDs rank first but come with higher risks.

Why Does Gold Investment Continue to Attract Attention?

Multiple Values of Gold: Gold is a traditional store of value with a global investment market; during turbulent times, it is seen as a “safe haven”; historically, it has served as a hedge against USD depreciation and inflation.

Institutional investors allocate gold in their portfolios mainly for its unique risk hedging function. Although volatile, gold does not offer fixed returns like deposits nor unlimited gains like stocks or futures, but it provides a sense of security amid market uncertainties and financial crises. Industry consensus suggests gold should constitute at least 10% of total investments.

Historical Trends: Whenever inflation or market turmoil occurs, enthusiasm for investing in gold surges. The Russia-Ukraine war broke out in February 2022, after which gold prices continued to rise, reaching a peak of 2,069 USD. Recently, international gold prices have again broken new highs, surpassing 3,700 USD, reaffirming gold’s role as a safe-haven asset.

Market Characteristics: Due to the large scale and long history of international gold trading, the market can quickly reflect major systemic events, leading to rapid surges and drops. As a result, investors often use gold for short-term trading to profit from price swings or as a hedging component in their portfolios.