There are numerous ways to invest in gold, including buying physical coins or bullion, or even through stocks or funds. But there are a lot of things to take into consideration before investing in gold, especially for first-timers.
As you build your investing portfolio, you might wonder: Is gold a good investment? While some investors may be interested in it as a hedge against inflation or market downturns, or to further diversify their portfolio, it’s important to know that investing in gold isn’t simple, especially for first-time investors. One reason is that there are so many ways to invest in gold, each with their own pros and cons.
Key Points
• Investors may invest in gold through physical gold, coins, jewelry, mining stocks, ETFs, mutual funds, futures, and options.
• Consider factors like cost, storage, market volatility, and purity when choosing how to invest in gold.
• Physical gold, coins, and jewelry offer direct ownership but may have high costs, storage needs, and markups.
• Gold mining stocks, ETFs, mutual funds, and derivatives provide various levels of risk and potential returns.
• First-time investors should explore gold as a hedge, verify authenticity, research risks, and actively monitor derivatives.
Why Some Investors Like Gold
Historically, investors have turned to gold as a way to hedge against the possibility of inflation or events that could negatively impact the equity markets. And while it can be volatile in the short term, gold has historically held its value well over the long term. Even investors who are not particularly concerned about inflation or about calamities affecting the broader market, may turn to gold as a way to diversify a portfolio.
5 Ways to Invest in Gold
For anyone considering investing in this precious metal, it can be helpful to familiarize yourself with the different ways one can invest in gold.
Buy Physical Gold
When thinking of ways to invest in gold, the first image that may come to mind is piles of gold bars in a place like Fort Knox. Those bars are also known as bullion, and it comes in bars that can be as small as a few grams, or as large as 400 ounces. The most common denominations of gold bullion are one- and 10-ounce bars.
For many investors, even the one-ounce bars can be too expensive, as they can cost thousands of dollars each. And because the bullion is a physical item, there’s no easy way to own a fraction of a bar. But if you do want to own bullion directly, the first order of business is to find a reputable dealer to buy from, and then look into the costs of delivery and insurance for the asset. Another option if you buy bullion is to pay for storage, either in a large vault or in a safety deposit box at a bank.
Buy Gold Coins
Gold coins offer another way to directly own the shiny yellow metal, in a variety of denominations including half-ounce and quarter-ounce. Well-known gold coins include South African Krugerrands, Canadian Maple Leafs, and American Gold Eagles, which have been known to sell at a premium to their actual gold content among collectors.
While you may be able to buy gold coins at a discount from local collectors or pawn shops, most investors will likely opt for a reputable dealer. As with bullion, it is important to protect this hard asset, either through insurance, or with a vault or safe deposit box.
Buy Gold Jewelry
If you don’t want your gold investment to just sit in a vault, then gold jewelry may be appealing. But it comes with its own considerations. The first is that gold jewelry may not have as much actual gold content as the jeweler claims. Verifying the authenticity of a piece not only protects you, but it will also help when it comes time to sell the piece. One way to do this is to only buy jewelry from reputable dealers, who can also deliver documentation about the piece.
Another point to remember is that a piece of jewelry will also come with a markup from the company that made it, which can make the piece cost as much as three times the value of its metal. And jewelry typically isn’t 100% pure gold — or 24 karats — so it’s important to know the purity and melt value of the jewelry before you buy.
Buy the Stocks of Gold Mining Companies
One way to take advantage of growth in the value of gold with your existing brokerage account that you might want to consider is to buy the stocks of companies in the gold business, including miners and refiners.
While gold stocks tend to go up and down with the price of gold, they may also experience price changes based on the company’s own prospects.
Buy Gold ETFs and Mutual Funds
If the risks of individual mining and refining companies are too much, you may want to consider a gold exchange-traded fund (ETF) or mutual fund. These vehicles — which are available through one’s brokerage account — invest in gold in different ways.
Buy Gold Futures and Options
Experienced investors with some familiarity trading derivatives may consider investing in the gold market through futures and options. These contracts allow the investor to buy or sell gold for an agreed-upon price by a fixed date. To trade these contracts, an investor needs a brokerage account that offers the ability to trade them.
An investment in gold options or futures contracts, however, requires active monitoring. These contracts expire on a regular basis, so investors have to be ready to sell, roll over, or exercise them as gold prices change, and as the contracts reach their expiration dates.
💡 Quick Tip: How to manage potential risk factors in a self directed investment account? Doing your research and employing strategies like dollar-cost averaging and diversification may help mitigate financial risk when trading stocks.
Considerations for Investing in Gold
Perhaps the most important thing to know about investing in gold is that it’s all but impossible to get a sense of where its value is headed in the near-term. In other words, predicting the future price of an idiosyncratic and volatile commodity like gold is all but impossible.
For instance, back in 2020, gold increased in value by 24.6% in U.S. dollars, and reached all-time highs in a number of currencies, in anticipation of a coming wave of inflation.
As of mid-2025, gold prices were hovering around all-time highs, having increased nearly 100% since mid-2020.
Further, one reason why gold investors believe the precious metal may have strong prospects is that the broader economy has been in an inflationary period. Most major economies experienced inflation following the pandemic, and gold prices increased accordingly.
The Takeaway
Investors interested in gold typically gravitate toward it as a hedge against inflation or as a means of diversifying their portfolios. Those who want access to this precious metal have some choices: They can buy bullion, coins, jewelry, mining stocks, ETFs, mutual funds, futures, and options.
Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).
FAQ
Why do some investors like investing in gold?
Many investors turn to gold as a way to hedge against inflation, or as a “safe haven” during market volatility. It can also be a way to diversify a portfolio.
Is it possible to buy gold stocks?
You can’t buy “gold stocks” specifically, but it is possible to buy stocks of companies involved in or adjacent to gold mining and production, as well as funds.
What are common ways to invest in gold?
Some common ways to invest in gold include buying physical gold such as bullion, coins, or jewelry, buying shares of gold-related stocks or funds, or options and futures related to gold.
Image credit: iStock/LeonidKos
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