Investing in gold is easier than ever in 2026, but there is always a debate about whether investing in gold is a good idea or not. Some people swear by gold and believe it is the answer to surviving a zombie apocalypse.
Others say it simply has no cash flow and has generated poor returns. Whatever your view on gold, one thing is certain, it helps diversify an investment portfolio.
If you invested $100 in gold and $100 in the S&P 500 in 1985, by 2026, your gold would be worth about $1,414, while your investment in the S&P 500 would grow to more than $9,545, assuming dividends are reinvested. However, during periods of market crises (such as the 2008 financial crisis or the 2020 pandemic), gold provided strong returns and served as a hedge, while stocks faced significant volatility.
We will not discuss the advantages of investing in gold in this article. There is already a lot on the Internet about this topic. In this article, we will focus on how to start investing in gold. We will divide investment avenues into two tracks – paper and physical gold.
How to invest in gold
Paper gold means investing in gold indirectly through stocks, ETFs, options and futures. There are several reasons to go this route versus investing in physical gold:
- There are no storage fees
- Low transaction cost
- Liquidity
- Potential profits or cash flows
For investors who want exposure to gold without any of the hassles that come with owning physical assets, paper gold products are an excellent option. We have mentioned four asset classes above. Let’s go through each one to understand what’s involved.
Invest in gold stocks and ETFs
Gold stocks and ETFs have the cheapest transaction costs (possibly $0 with these brokers) and are the easiest to invest in. You can invest in stocks of gold mining companies and ETFs that track gold.
Popular gold mining stocks include Barrick Gold Corporation (GOLD), Jaguar Mining Inc. (JAG.TO), and B2GoldCorp (BTG).
Well-known ETFs backed by physical gold include the SPDR Gold Trust (GLD), VanEck Merk Gold Trust (OUNZ), and Aberdeen Standard Physical Gold Shares ETF (SGOL).
Invest in gold options
Gold options are a little more advanced in that they use a lot of leverage. One options contract is equal to 100 shares of the underlying stock or ETF.
Specifically, if you are buying options, you will have to be careful about which strike you choose because they fade over time. Unlike stocks, where you can continue to hold shares indefinitely, the option will eventually expire, which could mean losing all of your investment.
Related toOptions Trading 101: What You Need to Know to Get Started
Invest in gold futures
Of the paper gold options listed in this guide, this is the most advanced. Futures contracts are the closest thing to trading actual gold without actually owning the gold bullion.
In the following section on physical gold, the spot price is mentioned several times. The spot gold price depends on the price of gold futures contracts.
As with options, futures also have high leverage and will eventually expire. You can also end up receiving physical gold if you do not sell the futures contract before expiration.
How to buy physical gold
Owning physical gold has a bit of mystery. Unlike paper products, you can touch physical gold. You can put it in your vault, ship it to storage somewhere far away, or trade it on secondary markets.
But owning physical gold costs more than owning paper products, both to obtain and to store. We break it all down below.
Purchase costs
Gold price Bullion or coins It is based on the spot price, which generally follows the gold futures contract. On top of the spot price there is a mark by the gold trader.
This dealer markup essentially represents the cost of the transaction although there may be a separate fee. These transaction costs will be much higher than any commissions you would pay online for purchasing paper gold products.
Storage costs
Next is storage fees. You need to store your physical gold in a safe place. This means a safe location and a fire safe location. Some people choose to store their gold in a home safe. While this will save money in storage costs, it leaves the gold vulnerable to high heat in the event of a house fire.
Instead of storing gold in a home safe, some choose to store it in a safe deposit box at a bank. While this may seem like a step forward, the problem with safe deposit boxes is that their contents are not insurable. Additionally, if something happens to the contents of your safe deposit box, the bank is not responsible.
There are also facilities for storing precious metals. It specializes in storing gold, silver and other precious metals. Some of these facilities can buy your gold when you are ready to sell it. Some even offer your contents insurance.
Vaulted is one example of a company that sells physical gold and provides flexible storage options. With Vaulted, you can choose to pay a 0.4% annual maintenance fee to keep your gold at the Royal Canadian Mint or you can have it shipped to you via FedEx. Buyers also pay a 1.8% transaction fee. Another competitor is Glint, which does the same thing.
Selling costs
At some point, you will want to sell your gold. Now you need to find a buyer. Here too, you will incur high transaction costs. Additionally, there is no indication that the buyer must pay the spot gold price, which means you may get a worse price.
Where to buy gold
It used to be that you had to go to a coin dealer or jeweler if you wanted to buy physical gold. Now it’s easier than ever.
There are traditional exchanges like APMEX that allow you to buy gold and other precious metals. There are now new apps like Glint and Vaulted that allow you to buy physical gold online (or keep it with them for storage).
until Costco Gold bullion sells now!
The important thing to remember is that you want to buy from a reputable dealer so you know you are getting genuine gold with the right purity and quantity you want.
Final thoughts
Gold tends to outperform stocks during chronic bear markets, but over multi-decade periods, stocks have had higher compound growth. This doesn’t mean you should rule out gold as an investment.
Purchasing paper gold products through a low-cost stock broker is a simple and cost-effective way to invest in gold today. But once you’ve done your homework regarding purchasing and storage options, investing in bullion or coins can further diversify your gold holdings and overall portfolio.
Finally, you can also consider investing in silver!
