How to invest in gold: physical, funds, stocks, IRA

Four ways to invest in gold

Way	You own	Main costs	Main risks
Physical gold	Coins and bars you hold	Premium over spot, shipping, storage, insurance, the gap when you sell	Theft, fakes, storage. Price changes.
Gold funds (ETFs)	Shares in a fund that holds gold	A yearly fee taken from the fund, plus any broker fee	Price changes. You do not hold the metal.
Mining stocks	Shares in companies that mine gold	Broker fees	Company risk: costs, debt, mine problems. Can move more than gold.
Gold in an IRA	Approved metal held by a custodian, or a gold fund	Custodian and storage fees	Tax rules. Penalties for withdrawals if rules are broken.

Physical gold

You pay the spot price plus a premium and you hold the metal. Small coins carry a bigger premium than large bars. When you sell, a buyer pays a bit under spot for common bullion, so you start a little behind. Read how to buy gold and use the premium calculator. Plan for storage and insurance.

Gold funds

A gold exchange-traded fund (ETF) is bought and sold like a stock. Funds such as SPDR Gold Shares and iShares Gold Trust hold gold bars in vaults and each share stands for a fraction of an ounce. You pay a yearly fee (the expense ratio), taken out of the fund's gold. Fees differ by fund and can change, so read the fund's fact sheet. At the time of writing, large gold funds charge between about 0.10% and 0.40% a year. On $10,000, 0.40% is $40 a year.

You cannot take delivery of the gold in normal cases, and the fund's tax treatment is covered below.

Mining stocks

A mining company's share price follows the gold price, but also its costs, debt and mines. In 2011 to 2015 the yearly average gold price fell about 26% (from $1,569 to $1,161 per ounce, World Bank), and miners can fall further than the metal. Treat them as stocks, not as gold.

Gold in an IRA

The tax law (section 408(m)) lets an IRA hold some gold coins and gold bullion that meets a minimum purity set by a regulated futures market. The metal must be held by the IRA's trustee or custodian, not by you at home. Buying other collectibles inside an IRA is treated as a withdrawal. Gold ETFs and mining stocks held in an IRA are ordinary IRA holdings. Ask the custodian for its fee list before you sign, and check with a tax professional first.

What can go wrong

• Price swings. Gold can stay below an old peak for a long time. After 1980, the yearly average did not get back above the 1980 average (adjusted for inflation) until 2024. The 1980 average of $608 is about $2,375 in 2025 dollars. See gold adjusted for inflation and gold price by year since 1960.
• No income. Gold pays no interest or dividends.
• Selling costs. Dealers and funds both have costs on the way in and on the way out. See where to sell gold and silver.
• Scams. The FTC reports cases of high-pressure phone sales, loans to buy metal and coins sold far above their gold content. See where to buy gold.
• Futures. Gold futures such as the CME's 100-ounce contract are for professional traders who can lose more than they put in. This guide does not cover them.

Taxes: general information

• Physical gold. The IRS lists metals such as gold, silver and platinum bullion as collectibles. Net long-term gains (held more than one year) on collectibles are taxed at your rate up to a maximum of 28%. Gains on gold held one year or less are taxed as ordinary income.
• Gold funds that hold the metal. Many are taxed like physical gold, so long-term gains can also be taxed up to 28%. Read the fund's prospectus.
• Mining stocks. Taxed like other stocks.
• Sales tax on buying physical gold varies by state: see the state list.

Tax rules change and depend on your situation. A tax professional can tell you what applies. Interested in silver instead? Read how to buy silver and the gold/silver ratio.

Sources

• IRS Topic 409, capital gains and losses and Instructions for Schedule D: collectibles (metals such as gold, silver and platinum bullion) and the 28% maximum rate.
• IRS, collectibles in individually directed retirement accounts and 26 U.S. Code section 408: coin and bullion exceptions and the trustee requirement.
• World Bank Commodity Price Data (Pink Sheet), CC BY 4.0, and U.S. Bureau of Labor Statistics CPI-U: yearly average prices and inflation, as shown on Lustre's history pages.
• CME Group, gold futures.
• Fund fee figures: the funds' own fact sheets at spdrgoldshares.com and ishares.com. Check the current figure before you buy.
• FTC, investment scams.