Buying physical gold or trading gold: which suits you?

What does buying physical gold involve?

You buy coins or bars from a dealer. You pay the gold price plus a premium, which is relatively high for small amounts. You then store the gold at home, in a safe or with a custodian. When you sell, you usually get slightly less than the current price.

Your result depends entirely on the gold price when you sell. If gold falls for years, you wait, or you sell at a loss.

What does trading gold involve?

When trading you don’t buy or sell physical gold; you trade the price of gold against the dollar: XAU/USD. You can enter if you expect a rise, but also if you expect a fall.

Trades often last from minutes to days. Leverage is usually used, which means a small price move has a bigger effect on your account, in both directions.

Which differences matter most?

• Ownership: with physical gold you own metal, with trading a position in a trading account.
• Earning: physical gold only on a rise, trading in both directions.
• Costs: premiums and storage versus spreads, swaps and any fees.
• Time: physical gold needs little attention, trading yourself needs a lot.
• Risk: with leveraged trading, losses can build up faster.

Where does an automated gold strategy fit?

Many people want to benefit from the lively gold market, but have no time or wish to watch charts every day. An automated strategy takes over the trading based on fixed rules, without emotion.

With Gold24 this happens in an account in your name. The strategy has a risk limit per trade and a hard stop at a 30% fall in the account. That limits the risk, but does not remove it.

Which suits you?

If you want a simple, tangible long-term buffer, physical gold or an ETF often fits better. If you want to actively profit from price moves, and accept the higher risk, trading may suit you. Many investors combine both. If in doubt, talk it through first with someone who knows your situation.

Frequently asked questions