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How to start investing in gold
There are a number of ways you can invest in gold, from buying the yellow metal directly to investing in a gold ETF or buying gold-mining stocks. We look at the pros and cons of each strategy.
With a history stretching back to the dawn of civilisation, investing in gold is perhaps one of the most tried-and-tested economic transactions you can make.
Strong demand from various sources drove global gold prices to new all-time highs early in 2026.
Gold outperformed the S&P 500 in 2025 for the second calendar year in a row. However, the price of gold fell 5.4% in 2026 to 21 July.
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The price of gold hit its all-time high of $5,595 per troy ounce on 29 January, having been driven upwards during the month by Trump’s intervention in Venezuela and rumours that the president was about to nominate a dovish chair of the Federal Reserve (Fed) to replace Jerome Powell.
In the end, Trump went with a more hawkish Fed chair pick in Kevin Warsh. This prompted a decline in gold prices, which then fell rapidly from the beginning of March as the conflict in the Middle East prompted a rush for liquidity and sparked fears of US interest rate hikes.
Do these declines suggest gold is no longer a safe investment?
“While the magnitude of the correction has unsettled investors, we view it as a healthy reset rather than the end of the structural bull market,” said Nitesh Shah, head of commodities and macroeconomic research at asset manager WisdomTree. “The extraordinary valuation premium that developed during the 2025–26 rally has largely been unwound, leaving gold much closer to our estimate of fair value.”
Macroeconomic fundamentals like interest rates are likely to be the bigger drivers of gold price movements for the rest of the year. High interest rates, especially in the US, are negative for gold prices because they increase the relative appeal of other safe haven assets like bonds which, unlike gold, pay interest.
Factoring in forecasts for inflation, US government bond yields and US dollar price movements, WisdomTree forecasts a gold price of $4,563 by the second quarter of 2027. This forecast, if accurate, implies gains of 11.9% from the 21 July close price.
How to invest in gold
There are various ways to add gold to your portfolio if you haven’t already. These range from buying gold bullion to investing in a gold ETF.
We take a look at the pros and cons of each.
Gold investing for beginners
It’s tempting to buy gold during a bull run like the one it enjoyed last year, but even when gold prices aren’t climbing there are good reasons to include an allocation in your portfolio.
“Gold can be a highly effective hedge against governments’ monetary and fiscal profligacy,” says James Luke, manager of the Schroder ISF Global Gold Fund.
Traditionally, bonds are used to diversify a portfolio away from equities, but bonds and equities have been relatively correlated in recent months.
Despite its defensive potential, most investors are relatively underweight gold. “We absolutely believe gold deserves a place in investors’ portfolios,” says Luke. “In our view a traditional 60:40 portfolio would benefit from diversifying 10% into a gold allocation.”
How to invest in physical gold
One way to add gold to your portfolio is by buying physical gold in the form of gold bars and gold coins.
“Physical gold, in the form of coins and bars, offers direct ownership with no counterparty risk, appealing to investors seeking tangible wealth preservation, albeit with storage and insurance costs,” said Cosmo Sturge, director, market strategy at precious metals fund manager Baker Steel.
Physical gold can be purchased from government mints such as the UK’s Royal Mint, precious metal dealers such as Sharps Pixley or GoldCore, and jewellers.
It is an unregulated market so you should be careful to avoid scams. One way to protect yourself is to always check whether a dealer is part of the London Bullion Market Association (LBMA), which sets standards across the industry.
As with any investment, it is important to do your own research on prices. Gold dealers make their money by selling for more than the spot price and buying for less. The difference – or spread – will vary depending on the gold content and weight of the bullion, who you buy from, and current supply and demand.
Gold coins can have more value than bars as they may be rarer and are often viewed as collectables, known as numismatic coins. Some forms of gold coin are tax-exempt, as they are legal tender. That means you won’t incur capital gains tax (CGT) if you sell them for a profit.
Buying gold bars or ingots is one of the most direct ways to invest in gold.
(Image credit: Charles O'Rear via Getty Images)
As attractive as buying a gold bar or coin may be, you should also consider the cost of delivery, insurance and secure storage. One solution may be using an online investment service such as BullionVault, which lets you invest in gold bars or coins which are stored in its vaults.
The Royal Mint also has a digital option that lets you invest in physical gold, silver or platinum based on monetary value instead of weight. It can then be stored in the Royal Mint’s vault.
Investing in gold with ETFs and ETCs
A simpler and cheaper way to invest directly in gold is through exchange-traded funds (ETFs) – or to be precise, exchange-traded commodity (ETC) products.
“Physically backed gold ETFs provide a convenient and cost-efficient alternative, delivering exposure to the gold price without the practical challenges of holding bullion,” said Baker Steel’s Sturge.
Analysts typically favour physically-backed ETCs, such as WisdomTree Physical Gold (LON:PHGP), over synthetic products that rely on derivatives to replicate gold price movements.
The advantages of ETCs are that they own physical gold, making them a simple means to track gold price changes, and can be held in a SIPP or ISA.
Take a look at our article on the best gold ETFs for more information.
Investing in gold miners
Rather than buying actual gold, you could consider backing the companies involved in gold exploration or mining. This would mean buying shares in gold miners. This is riskier than tracking the gold price, as a company’s success will be linked to its exploration activities, business strategy and management.
“While gold miners carry additional volatility versus physical gold, they can offer operational leverage to rising gold prices, as well as shareholder returns and exploration and development upside,” said Sturge.
But while investing in gold miners can come with greater reward, there is also the risk of incurring greater losses.
Rather than picking individual gold mining stocks, you could select a fund consisting of gold miners. For example, the L&G Gold Mining UCITS ETF (LON:AUCP) tracks the Global Gold Miners Index, and as such holds companies like Agnico-Eagle Mines (LON:0R2J) and Newmont (LON:0R28).
Join more than 165,000 subscribers and keep yourself informed with the latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Dan is a financial journalist who, prior to joining MoneyWeek, spent five years writing for OPTO, an investment magazine focused on growth and technology stocks, ETFs and thematic investing.
Before becoming a writer, Dan spent six years working in talent acquisition in the tech sector, including for credit scoring start-up ClearScore where he first developed an interest in personal finance.
Dan studied Social Anthropology and Management at Sidney Sussex College and the Judge Business School, Cambridge University. Outside finance, he also enjoys travel writing, and has edited two published travel books.
