--- title: 'Physical Gold vs. Gold Stocks vs. Gold ETFs: Which Is Best for You?' description: If you're looking to invest in gold, you'll want to understand the three main approaches first. authors: - name: Jordan Chussler role: Editor, Investing and Banking url: https://money.com/author/jordan-chussler/ bio: Jordan is an investment editor and CPFC who specializes in traditional equities, gold and other precious metals, retirement savings and income investing. He combines his personal and professional interests in finance and education to help readers increase their financial literacy and make better investment choices. education: Lynn University certifications: Certified Personal Finance Counselor at_money_since: 2023 articles: 130 covers: - Investing - Banking - Credit - Credit Cards - Economy and Politics - Housing - Identity Theft - Insurance - Loans - Mortgages - Personal Finance - Professional Services - Retirement also_seen_in: - Weiss Ratings - 24/7 Wall Street - Better Investing - Yahoo Finance - Nasdaq - Investing.com - Marketbeat - MSN Money social: - https://www.linkedin.com/in/jordan-chussler-b3597811/ updaters: - name: José Omar Rodríguez role: Content Manager url: https://money.com/author/jose-omar-rodriguez/ bio: As an editor, José Omar specializes in personal finance topics and in-depth company reviews. His work has been featured in publications such as the Sacramento Bee, the Miami Herald, and the Kansas City Star. education: University of Puerto Rico at_money_since: 2019 articles: 21 covers: - Investing - Banking - Business - Career Advice - Credit - Credit Cards - Economy and Politics - Housing - Identity Theft - Insurance - Lifestyle - Loans - Mortgages - Pets - Professional Services - Retirement - Taxes - Technology published: '2024-12-12T14:21:37.000Z' modified: '2026-08-03T15:26:52.000Z' section: Investing word_count: 852 canonical: https://money.com/physical-gold-vs-gold-stocks-vs-gold-etfs/ type: Article source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. 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Gold is often considered an attractive investment because it’s used as a [hedge against inflation](https://money.com/heres-how-inflation-impacts-gold-prices/) and a falling U.S. dollar. Additionally, it can be used as a medium of exchange in some cases. However, you need to decide whether [owning physical gold](https://money.com/how-to-buy-gold/) or looking into gold stocks or gold exchange-traded funds (ETFs) makes sense. Each approach has advantages and disadvantages, so it’s important to consider your goals and decide which strategy is likely to work best for you. ## Physical gold [Physical gold](https://money.com/how-to-buy-gold-bars/) is a tangible [precious metal](https://money.com/what-makes-a-metal-precious/) that is typically purchased in the form of bars, ingots, round or coins. It’s important to purchase physical gold from a reputable source and verify the purity of the gold beforehand. IRS-approved gold, meaning gold that is eligible to be held in a self-directed individual retirement account (also known as a [gold IRA](https://money.com/best-gold-ira-companies/)), generally must meet minimum fineness requirements (commonly 0.995 for bullion, with certain coin exceptions) and be held in the physical possession of an IRA trustee or custodian. Read our guide to the [Best Online Gold Dealers](https://money.com/best-online-gold-dealers/) to find reputable companies selling these high-quality products. When you invest in physical gold, you will need to figure out how to store it and whether or not you’ll [require insurance](https://money.com/how-to-insure-physical-gold/). There are three main ways for you to store gold: - **Yourself:** Invest in a safe and keep it on your property. You can store your gold in the safe where it’s accessible. - **Bank safety deposit box:** Some banks allow you to keep relatively small amounts of gold in a safety deposit box. You’ll need to pay the fee for the box. Double-check the bank’s insurance to determine whether you need extra insurance in case of loss. Accessing the gold later can be a little more complicated. - **Storage facility:** Gold storage facilities are also available. When you buy physical gold, you can pay to have the gold sent to the facility. You will have information about how it’s sold and how to access it later if you want it. A fee is required, and you might also need to purchase insurance. Importantly, for precious metals kept in gold IRAs, this is the only storage option permitted by the IRS in order to maintain tax advantages. Often, when you buy physical gold as an investment, you’ll pay a premium, which means you pay a little more than market value for the gold. You’ll be [taxed](https://money.com/how-is-gold-taxed/) at the [capital gains rate](https://www.irs.gov/taxtopics/tc409) for collectibles when you sell your gold, so you'll pay a maximum tax rate of 28% (and higher-income taxpayers may also owe the 3.8% Net Investment Income Tax). ### Pros and cons of investing in physical gold **Pros** - Ownership of a tangible asset - Might be used as a medium of exchange - Can easily be transferred to heirs **Cons** - Can be challenging to store - Extra costs come with storage - Fees, taxes and insurance can apply ## Gold stocks Gold stocks represent ownership of shares in companies associated with gold, such as [gold miners](https://money.com/who-owns-the-worlds-biggest-gold-mines/) and gold streamers. Gold streamers provide financing to miners to help them survey and produce the precious metal. Investors typically buy gold stocks on an exchange. Gold stocks can be closely correlated with the price of gold, but you don’t actually own any gold in this instance. You pay your usual transaction fees, if there are any. If you hold gold stocks for more than a year, they are eligible for the favorable long-term capital gains rate when you sell shares. It’s important to conduct your own research, since the publicly traded companies offering gold stocks might have their own profitability issues. However, it’s relatively easy to invest through [online trading platforms](https://money.com/best-online-stock-trading-platforms/) and [stock trading apps](https://money.com/best-stock-apps/), and you don’t have to worry about storing or insuring physical gold. ### Pros and cons of investing in gold stocks **Pros** - Gold stocks may pay dividends - Lower cost way to gain exposure to gold price movements - No maintenance, storage or insurance costs **Cons** - May not hold value the same way physical gold does - Researching companies can be complicated - Performance can be correlated to stock market unlike physical gold ## Gold ETFs [Gold ETFs](https://money.com/best-gold-etfs/) also don’t provide you with access to physical gold. Instead, the gold ETF you choose to invest in is based on the underlying price of gold, or one the performance of a basket of gold-mining companies. Depending on the ETF, there might be exposure to physical gold. Some ETFs hold contracts and options, and with how some gold ETFs are structured, you might end up paying the potentially higher capital gains rate for collectibles. ETFs trade like stocks on an exchange, so it’s possible to easily purchase a gold ETF through your brokerage. However, some gold ETFs have comparatively higher expense ratios — the fees of management and administration associated with the fund. With gold ETFs, you have the advantage of adding gold exposure to your portfolio without the need to buy, store or insure physical gold. ### Pros and cons of investing in gold ETFs **Pros** - Easy to invest through a brokerage account - Don’t have to store, maintain or insure the asset - Costs can be lower than with physical gold **Cons** - May have the same tax treatment as physical gold - Don’t own a tangible asset - Expense ratios might be higher than non-commodity ETFs ## Bottom line Gold can be a good addition to your [investment portfolio](https://money.com/is-gold-a-good-investment/) if it fits your long-term strategy and goals. You have different choices, including physical gold or using equity investments like gold stocks and gold ETFs to gain exposure to [gold price movement](https://money.com/what-drives-the-price-of-gold/). Carefully consider what’s likely to work best for you and consult with a professional before determining how to move forward with your physical gold vs. gold stocks vs. gold ETFs decision. ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/physical-gold-vs-gold-stocks-vs-gold-etfs/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Investing", "item": "https://money.com/investing/" }, { "@type": "ListItem", "position": 3, "name": "Gold", "item": "https://money.com/gold/" }, { "@type": "ListItem", "position": 4, "name": "Physical Gold vs. Gold Stocks vs. Gold ETFs: Which Is Best for You?" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/physical-gold-vs-gold-stocks-vs-gold-etfs/#webpage", "url": "https://money.com/physical-gold-vs-gold-stocks-vs-gold-etfs/", "name": "Physical Gold vs. Gold Stocks vs. Gold ETFs: Which Is Best for You?", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2024-12-12T14:21:37.000Z", "mainEntity": { "@id": "https://money.com/physical-gold-vs-gold-stocks-vs-gold-etfs/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/physical-gold-vs-gold-stocks-vs-gold-etfs/#breadcrumb" }, "dateModified": "2026-08-03T15:26:52.000Z" }, { "@type": "Article", "headline": "Physical Gold vs. Gold Stocks vs. Gold ETFs: Which Is Best for You?", "articleSection": "Investing", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2024/12/Gold-Stock-Versus-Physical.jpg", "width": 2386, "height": 1591, "caption": "Gold-Stock-Versus-Physical" } ], "author": [ { "@type": "Person", "name": "Jordan Chussler", "url": "https://money.com/author/jordan-chussler/", "@id": "https://money.com/author/jordan-chussler/#author", "description": "Jordan is an investment editor and CPFC who specializes in traditional equities, gold and other precious metals, retirement savings and income investing. 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