Ways to own gold

There is more than one way to own gold, and each comes with different costs and risks.

Physical gold

Bars and coins are the most direct way. Bullion coins such as the Krugerrand, the Maple Leaf or the American Eagle, and bars from 1 gram to 1 kilogram, are valued mainly for their gold content. Larger bars cost less over the spot price per gram; very small ones cost noticeably more.

Jewellery is how most people in the world own gold, especially in Africa, India and the Middle East. Its price includes making charges for the craftsmanship, so a good part of what you pay is not gold, and that part is usually lost when you sell.

You need somewhere safe to keep physical gold, and you should keep the receipts and certificates.

Gold funds

Exchange traded funds, or ETFs, are funds listed on a stock exchange that hold gold bars in a vault. Each share follows the gold price, minus a small yearly fee. They are easy to buy through a broker, but you do not hold the metal yourself and usually cannot collect it.

Mining shares

Shares in gold mining companies tend to rise and fall more than gold itself, because a miner's profit swings a lot with the gold price. They also carry company risks, such as costs, debt and management, that have nothing to do with gold.

Tokenised gold

Tokenised gold, such as Tether Gold (XAUT) or PAX Gold (PAXG), is a digital token where each unit is meant to represent one troy ounce of gold held in a vault. You can buy small fractions and move them at any hour. The risks are different: you depend on the issuer and its vault actually holding the gold, rules differ between countries, and swapping tokens for metal usually needs a large minimum and fees. The lesson Physical or digital gold covers this in detail.

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