Physical Gold

You could buy gold in the form of jewellery, gold bars or gold coins. Different forms of gold can have different prices per gram depending on manufacturing and labour costs. For example, when you buy jewellery, you may pay for the design and value of the gold, but when you try to resell it, you most likely will only get 70% of the market value. When you buy physical gold, you are responsible for keeping it safe. So, you may have to rent a vault or insure the gold yourself. Physical gold is less liquid as you will have to find a buyer yourself. The spread can fluctuate depending on who you buy gold from.

What do you need to look out for?

In some cases, when you buy gold bars or coins from a store, the gold could be mixed with other metals. So make sure you get a certificate of authenticity and only buy from an authorised seller.

Gold-backed Exchange Traded Fund (ETF)

An ETF is a basket of securities (like stocks) you buy and sell through the stock exchange. A gold backed ETF trades like regular ETFs but is only backed by one asset, gold. To learn more about ETFs, read our guide.

Currently, the only gold backed ETF on Bursa Malaysia is the TradePlus Shariah Gold Tracker which follows the performance of gold. Most ETFs use unallocated gold so you don’t have ownership of the gold. Since ETFs are traded on an exchange, they are highly liquid investments and usually have a very small spread. Some ETFs do pay you a dividend, on top of earning from the increase in the price of gold.

What do you need to look out for?

TradePlus Shariah Gold Tracker essentially just tracks the price of gold. So you will not have any right to any gold.

Gold Investment Accounts (GIA)

You could invest in gold through gold investment accounts from banks. Through these accounts, you can make a profit from your investment by buying and selling gold online, making it a highly liquid investment. With most banks, the minimum amount to buy is 1g. GIAs use unallocated gold so the bank has ownership of the gold. So, you won’t be able to withdraw gold from the banks. But, you can get your investment back in cash or you can credit it to your other accounts. GIAs usually charge a large spread .

What do you need to look out for?

The gold in GIAs are not protected by the Perbadanan Insurans Deposit Malaysia (PIDM). So if the banks have to shut down, your investment will be lost.

Internet Investment Gold

There are a few companies like HelloGold, that allow you to buy physical gold online and will store the gold for you in a vault (allocated) until you wish to sell it. There are two options for you to sell your gold. One is to sell it back to the company, or you could withdraw your gold from the company. Most internet investment gold companies have low minimum investment requirements and usually charge a low spread but have other costs like transaction and administrative fees. Internet investment gold is usually highly liquid, unless you withdraw the gold from the company.

What do you need to look out for?

Some companies will not buy back the physical gold from you once you withdraw it and you will have to sell it elsewhere.

Gold-Related Stocks

You could buy shares of gold mining or jewellery companies. Gold mining companies’ stock price may relate to the gold price, However, it is important to remember that there are other factors that can drive the stock price. If the company is profitable and gives dividends, you could be earning more than if you just invested in gold.

What do you need to look out for?

Remember, there are other factors that determine the price of the stock. So even if the price of gold is rising but the company is not performing well, the price of the stock may not increase and you won’t receive dividends. Like investing in any other stock, make sure to do your homework on understanding the company before investing. Read our guide to understand what stocks are and how you should value them.