3 Different Ways to Buy Gold

While stock markets have shrugged off negative news and remain at or near all-time highs, many Americans are nervous and uncertain about the future. And many don’t think that they’ll be prepared financially for an economic downturn.

With renewed focus on tariffs, continued problematic inflation, and growing concern about the future of the economy, many Americans are looking for ways to protect themselves against potential future economic malaise. And one way they’re doing that is by buying precious metals like gold as a safe haven asset.

They aren’t the only ones either, as central banks around the world are also purchasing gold in record amounts, adding gold to their holdings as they continue to move away from the US dollar.

Even if you understand that gold can play a valuable role in an asset portfolio, figuring out the best way to buy gold can seem daunting. Here are three ways that you can buy gold, along with some of their relative advantages and disadvantages.

Key Takeaways

• Americans are increasingly turning to gold as a safe haven asset amidst economic uncertainty.
• There are three popular methods to buy gold today.
• Each method of buying gold has unique advantages, disadvantages, and potential tax implications that you need to consider.

1. Physical Gold – The Traditional Way

For centuries the only way to buy gold was to purchase physical gold, whether that was gold coins, gold bars, or gold jewelry. After gold coins ceased to circulate as currency, other gold coins were later developed to serve safe haven demand for gold.

That gold would then be stored at home, held in a safe deposit box, or stored elsewhere such as in a bullion depository. The advantage of holding physical gold is that it is available when you need it, particularly if you own it at home.

If you find yourself with a sudden need for cash you can take your coins to the nearest coin dealer, metal broker, or pawn shop and get the money you need. Or in this day and age you can take to online marketplaces or websites to try to sell your coins.

The major disadvantages to owning physical gold are storage and insurance, which impose costs. If you store gold at home you might want some sort of safe, and you might need to take out an insurance rider if your home insurer offers to insure precious metals.

Or you could store your gold in a safe deposit box at the bank, which also costs money. And if you have significant holdings of gold, you might look at storing it at a bullion depository, which again imposes additional cost.

External storage means that your access to your gold is dependent on your bank or depository being open. Outside business hours you can forget about being able to get to your gold.

And what would happen in the event of a bank holiday, a bank failure, or even a government seizure of your safe deposit box provider? Would you be able to get your gold if you really needed it?

2. Exchange-Traded Funds (ETFs) – An Increasingly Popular Choice

Exchange-traded funds (ETFs) have become an incredibly popular investing method over the past decade. They offer people the opportunity to gain exposure to a wide variety of assets, especially commodities, without having to purchase the assets themselves.

In the case of gold ETFs, the fund holds gold and issues shares in the fund that can be purchased. Those funds trade just like stocks or mutual funds, and are often available through normal brokerage accounts.

The value of the shares is supposed to rise and fall along with the value of gold. The major advantage to ETFs is that the shares are highly liquid and are able to be bought and sold relatively easily.

Owning shares in a gold ETF also means that you don’t actually own any physical gold, so you don’t have to worry about storage, insurance, etc.

The disadvantage to ETFs is that investors don’t actually know if the fund owns as much gold as it says it does, nor do they know the exact relationship between the number of outstanding shares and the amount of gold held.

What’s to keep the fund from continuing to issue a larger number of shares while still owning the same amount of gold? That’s a major question when it comes to “paper gold.”

Gold ETFs also don’t allow investors to take physical possession or ownership of any underlying gold. So if there ever comes a time when you want to take physical possession of gold, you’re out of luck.

3. Gold IRAs – A Modern Safe Haven

Finally there are gold IRAs. Gold IRAs operate in the same manner as conventional IRAs, only that instead of owning conventional financial instruments such as stocks, bonds, or shares in funds, they own physical gold coins or gold bars.

Gold IRAs can be either Traditional IRAs, which acquire gold with pre-tax dollars, or Roth IRAs, which acquire gold with post-tax dollars. Gold IRAs are subject to all the same rules regarding distributions as any other IRA, and distributions from a gold IRA can be made either in cash or in gold.

Owning gold in a gold IRA means that you actually own physical gold coins or gold bars that are managed by an IRA custodian and held in a bullion depository. You choose which gold coins or gold bars you want to buy, and those coins or bars are then stored for you.

A gold IRA can be a kind of middle ground between an ETF and owning physical gold at home.

You get the benefits of owning physical gold, including being able to take possession of it when you take a distribution from your IRA, but you don’t have to worry about someone stealing it from your home, because it’s stored in a depository.

And with a gold IRA you also get all the same tax advantages as any other IRA account, including the ability to fund your gold IRA with a tax-free rollover from your existing retirement accounts.

How Do You Want to Buy Gold?

The decision on how to buy gold is ultimately a personal choice that you’ll have to decide on your own, after possibly consulting with a financial advisor or tax advisor, and will take into account your current situation and your personal goals.

Whether you are thinking about buying gold coins to store at home, buying shares in a gold ETF, or starting a gold IRA, there is no one best way to buy gold. You could even do all three if you wanted to.

If you’re looking for a trusted partner to buy gold from, look no further than Goldco. With over $3 billion in precious metals placements and over 7,000 5-star reviews from our customers, we have worked hard for over a decade to make ourselves one of the best gold companies in the country.

Our dedication to customer service and quality gold and silver products set us apart from our competitors. So if you’re looking to buy precious metals, whether that’s through a direct cash purchase or through a gold IRA, give Goldco a call today.

This article was originally published in May 2019 and was updated in August 2025.