The Best Ways to Invest in Gold: From Bars and Bullion to Stocks and ETFs
It's easier now than ever to invest in gold. Some of the best ways to buy and sell gold include gold ETFs, gold mining stocks, and gold investing apps.
Published Mar 8, 2022•Updated Mar 17, 2022
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Gold is considered one of the best commodities to invest in, and for good reason. It can help keep your portfolio afloat during market downturns, and it also acts as a great hedge against inflation, preserving the value of your assets as prices go up.
However, gold might not seem like the most accessible investment, particularly if you're used to staying traditional with stocks and bonds.
Arguably offering the best of both worlds, new gold investing apps have combined the diversification benefits of investing directly in physical gold with the ease, convenience, and low barrier to entry of gold ETFs and stocks.
There are many different ways to invest in gold, and while some involve buying physical gold, you can also add this precious metal to your portfolio by buying gold ETFs, gold stocks, and even using a gold investing app. Here are all the best ways to invest in gold.
You can invest in physical gold by purchasing gold bullion, gold coins, or gold jewelry. Although, Vaulted CEO David McAlvany doesn't see gold jewelry as a particularly cost-effective way to invest in gold. "You might consider [gold jewelry] a form of investment in gold," says McAlvany, "but generally, I don't because the premiums you pay on that are so high."
Investing in physical gold like bullion and coins is more complicated than, say, purchasing shares of a stock or ETF. You'll need to work with a gold dealer and pay for additional costs like transportation, storage, and insurance. You could go the DIY route and store it in a safe deposit box for under $200 per year, but you'll likely still need an insurance policy as most home insurance policies don't cover gold. What's more, a physical gold investment isn't a very liquid investment—if you need to sell off your gold for cash, it could take a while.
That said, physical gold does have its advantages. For one, it's much less susceptible to following market downturns than gold stocks and gold ETFs, which are more likely to correlate with the S&P 500. This means that physical gold is one of the best ways to invest in gold if you're looking for a recession-resistant asset that can hedge against inflation.
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- SPDR Gold Shares (ticker: GLD)
- iShares Gold Trust (IAU)
- Aberdeen Standard Physical Gold Shares ETF (SGOL)
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"There's no way to know with an ETF how much gold and silver that fund has," Plume explains. "So you're always held to making sure that ETF is doing the right thing." For example, during the pandemic, demand for gold and silver increased so much that it was nearly impossible to obtain—and yet, precious metals ETFs were selling at record numbers. Plume speculates that these ETFs may have not been fully backed by gold and silver reserves at the time, which is a cause for concern for many investors who want to know exactly where their money is going.
Gold ETFs are one of the easiest and most popular ways to invest in gold. You can open a brokerage account with platforms like TD Ameritrade or Robinhood, fund your account, and buy gold ETFs with the click of a few buttons. Gold ETFs track the price of gold and behave much like individual stocks. Not only is this a much more liquid investment than buying physical gold, but it typically also comes with very low minimum investment requirements.
While gold ETFs offer much in the way of convenience, they may be lacking when it comes to transparency, according to Noble Gold president Collin Plume.
- Equinox Gold Corp. (EQX)
- Barrick Gold Corp (GOLD)
- Franco-Nevada Gold (FNV)
Like gold ETFs, "gold stocks" provide investors with an easy way to add a highly liquid (pun not intended) gold investment to their portfolios. Gold stocks are shares of stock in gold mining companies, and as such, their value is dependent upon the gold mining market. While they typically track the price of gold, some gold mining companies may continue to be profitable even when the price of gold is down and vice-versa.
As such, you'll want to consider a gold mining company's individual performance in addition to the overall gold market when investing in gold stocks. Some gold stocks even offer decent dividends, which makes this one of the best ways to invest in gold for investors looking for passive income.
Gold investing apps
Gold investing apps
- Noble Gold
Arguably offering the best of both worlds, new gold investing apps have combined the diversification benefits of investing directly in physical gold with the ease, convenience, and low barrier to entry of gold ETFs and stocks. While this way of buying gold is relatively new, especially for everyday investors, it's one of the best ways to invest in gold if you want a direct investment without all the hassle.
Platforms like Vaulted and OneGold let you buy gold with the click of a few buttons and as little as $1—and you don't have to worry about costly logistics like storage and insurance, because they take care of those things.
For example, gold purchases through Vaulted are allocated to specific gold bars, and you can even see the serial number of the gold bar(s) you're invested in on their app. If the price of gold goes up, so does the value of your investment. Plus, you can sell your gold investment at any time.
With OneGold, you invest in digital assets that are fully backed 1:1 by gold, silver and platinum. The value of your investment appreciates if the price of precious metals goes up, and you can sell at any time.
Is gold a good investment in 2022?
Is gold a good investment in 2022?
Whether or not gold is a good investment in 2022 comes down to your particular investment goals and financial needs. It's often seen as a safe asset for protecting wealth from inflation, so it may be a good option to allocate a small portion of your portfolio to gold if you want to err on the side of preservation.
That said, some investors use gold as a tool for growth by attempting to purchase when the price of gold is undervalued or expected to rise. No one can say for sure where the price of gold will go in the next year and beyond. Gold did underperform during the latter half of 2021, so some experts are predicting the price of gold will rise significantly in 2022. And indeed, the price of gold soared during the first few months of 2022, surpassing early-2021 levels. That said, whether the price of gold is just beginning its ascent or is set to take another hit later in the year remains to be seen.
Gold may be the most popular precious metal to invest in, but it's not the most valuable. Often dubbed "rich man's gold," this precious metal is rarer and typically more expensive than gold, although its price has been uncharacteristically below the price of gold since 2015.