Comprehensive analysis of the five major channels for gold investment: How to find the most suitable entry method for you?

In an era of increasing global economic uncertainty, gold has once again become the focus of investors. From the gold price breaking through $2,700 in 2024 to surpassing the $3,700 mark in 2025, this rally reflects factors such as strong central bank gold purchases and rising geopolitical risks. But the question facing investors is: what is the best way to buy gold?

Depending on your investment goals, gold investment methods vary greatly. Do you want long-term preservation of value or short-term profit from price differences? Can you tolerate volatility risk? How much capital do you have? These factors determine which investment tool you should choose. This article analyzes the characteristics, costs, and risks of five major gold investment channels to help you find the most suitable entry method.

The Core Logic of Gold Investment: Choosing the Right Tool Over Timing

Many investors are concerned about when to enter the market but overlook a more important question—the method of entry. In fact, rather than predicting short-term gold price movements, finding a tool that matches your investment style is more critical.

The performance of gold prices over the past two years has fully demonstrated its hedging value, but short-term fluctuations are inevitable. Long-term investors should focus on finding good entry points and avoid chasing highs; traders seeking to profit from price differences need flexible, low-cost tools.

Cost Comparison of Five Major Gold Investment Methods

Preservation Priority: Physical Gold and Gold Bar Investment Strategies

Where is the most cost-effective place to buy gold bars?

Physical gold includes gold bars, ingots, and commemorative coins, mainly purchased through banks and jewelry stores. For large grams of gold bars or ingots, Taiwan banks are the preferred choice because of guaranteed quality and relatively low processing fees. The gold bars sold by Taiwan Bank start at 100 grams, with options including 250g, 500g, and 1kg, fully meeting different investor needs.

For smaller gold bars, jewelry stores can be considered, but attention should be paid to purity verification to avoid buying counterfeit or overpriced gold bars. It’s advisable to compare prices across different stores, as cost differences can exceed 5%.

The Real Cost of Physical Gold

On the surface, physical gold investment has a low entry barrier, but the actual costs are not insignificant. Besides the purchase spread, consider storage fees, insurance costs, and future selling fees and wear and tear. If the transaction exceeds NT$50,000, it must be declared as personal temporary trade income and taxed at a 6% profit rate.

For investors seeking true preservation of value, physical gold indeed provides psychological security. However, from an investment efficiency perspective, it is not an ideal trading tool.

Combining Liquidity and Convenience: Gold Passbook and ETFs

Gold Passbook: The Most Balanced Choice

Gold passbook (paper gold) allows you to benefit from gold price fluctuations without holding physical gold. Banks custody the gold, and transactions are conducted via the passbook, making it much more convenient than purchasing physical gold bars.

Taiwan Bank, E.SUN Bank, and E.SUN Bank all offer gold passbook services. Notably, Taiwan Bank launched the “Dual Currency Gold Passbook” in 2023, enabling investors to benefit from both exchange rate movements and gold price fluctuations.

The transaction fee for gold passbook is moderate, but frequent trading can accumulate currency exchange costs. It’s recommended to adjust holdings monthly or quarterly rather than daily. Tax-wise, profits are included in property transaction income for taxation.

Gold ETF: The Low-Cost Entry Preferred

Gold ETFs (exchange-traded funds) are ideal tools for small investors. Taiwan’s gold ETF(00635U), US gold ETFs(GLD and IAU) all offer sufficient liquidity and transparent cost structures.

Compared to gold passbook, ETF management fees are lower (US ETFs annual fee 0.25-0.4%), and trading can be done directly through brokers without opening a bank gold account. The only limitation is that you can only go long, not short, making it suitable for long-term holders.

For High-Efficiency Trading: Futures and CFDs

Gold Futures: Professional-Level Two-Way Trading

Gold futures allow investors to operate both long and short positions, leveraging to amplify gains. The 24-hour, globally linked price mechanism ensures ample liquidity and reduces manipulation risk. The transaction tax is only 0.0000025, making it extremely low.

However, futures have expiration dates and involve rollover costs and forced liquidation risks. Overseas futures brokers (such as CME gold futures) offer longer trading hours and better liquidity, making them the top choice for professional traders.

Gold CFD: The Lowest Barrier Leverage Trading

CFDs (Contracts for Difference) further lower the entry barrier for gold trading. Unlike futures, CFDs have no expiration date or fixed contract size, with initial margin requirements as low as USD 18 for 0.01 lots on some platforms.

CFDs support two-way trading and multiple leverage options (from 1X to 100X). Fees mainly come from spreads rather than taxes. For traders with limited capital engaging in short-term trading, CFDs are the fastest way to enter the gold market.

Tax-wise, if overseas income exceeds NT$1 million in a year, it must be combined with basic income for minimum tax calculation.

How to Choose? Core Decision Matrix

What is your investment goal?

If preservation and hedging are primary: Choose physical gold bars or gold passbook. Physical gold offers psychological security but higher costs; gold passbook provides higher liquidity and moderate fees.

If steady appreciation is the goal: Gold ETFs are the best option. Low management fees, high liquidity, small entry amounts, suitable for long-term dollar-cost averaging.

If you want to profit from volatility: Gold futures and CFDs are the core tools. Futures are suitable for experienced risk managers; CFDs, with lower barriers, are better for beginners to experience leveraged trading.

Why Are Gold Prices Continually Reaching New Highs? Investment Logic Review

Over the past year, gold prices have increased by over 50%, driven by multiple factors. The Fed’s easing expectations boosted safe-haven demand, and global central banks purchased a net 1,045 tons of gold in 2024 (over 1,000 tons for three consecutive years), directly supporting gold prices to break historical highs.

Rising geopolitical risks, a weakening US dollar, and inflation expectations confirm gold’s status as the “ultimate safe-haven asset.” This is why institutional investors generally recommend allocating at least 10% of their portfolios to gold.

Practical Advice: Building Gold Allocation in Stages

If you are new to gold investing, a phased approach is recommended:

In the first stage, try small amounts with gold ETFs (monthly investment NT$1,000-5,000) to build familiarity with the gold market. In the second stage, after accumulating sufficient knowledge and trading experience, consider allocating to gold passbook or physical gold bars as long-term assets. In the third stage, if you master technical analysis and can bear risks, consider entering futures or CFD for short-term trading.

This gradual approach avoids the risks of lump-sum investment and lays a foundation for advanced operations.