Education, not advice. We do not sell any of these products and earn nothing from them. Fees and tax figures below are quoted from the official sources linked in each section, as of October 26, 2026.
People who want gold in their savings usually end up comparing three routes: a gold IRA (a self-directed individual retirement account that holds metal in a vault), physical gold they buy and hold themselves, and a gold exchange-traded fund, a share traded on a stock exchange that is backed by gold held by a trust.
All three follow the same gold price, more or less. What differs is who holds the metal, what you pay along the way, how the tax rules work, and what can go wrong. This guide lays those differences side by side without telling you which to pick.
The short version
| Gold IRA | Physical gold you hold | Gold exchange-traded fund | |
|---|---|---|---|
| What you own | Coins or bars owned by your retirement account | Coins or bars in your own name | Shares of a trust that holds gold |
| Who holds the metal | A custodian or trustee, through a depository | You, or a storage company you choose | The trust's custodian banks |
| Main costs | Dealer premium and spread, setup, annual custodian, storage and insurance fees | Dealer premium and spread, your own storage and insurance | Annual expense ratio or sponsor fee, broker commissions, bid-ask spread |
| Tax treatment | Retirement account rules | Collectibles rules on any gain | Collectibles rules on any gain if held in a taxable account; retirement account rules if held in one |
| Federal oversight of the seller | Dealers are not regulated at the federal level | Dealers are not regulated at the federal level | Fund shares are registered and traded on regulated exchanges |
The sources for each row are in the sections below. The last row comes from the Commodity Futures Trading Commission, which says retail metal dealers are not regulated at the federal level and describes exchange-traded products as fully regulated (Commodity Futures Trading Commission).
Option 1: a gold IRA
A gold IRA is a self-directed individual retirement account whose custodian lets it own approved coins and bars. The law treats most metal and coins bought by such an account as "collectibles", which count as a taxable distribution, with exceptions for certain United States gold coins, coins issued by a state, and bullion of the purity a futures exchange requires for delivery, held in the physical possession of a trustee (Cornell Law School, 26 U.S. Code § 408). Our guide on how a gold IRA works covers those rules, rollovers and required distributions in detail.
What it can offer. The metal sits inside a tax-advantaged retirement account, so the account follows normal retirement account tax rules rather than the collectibles rules described below.
What it costs. The Commodity Futures Trading Commission lists the costs to ask about: the dealer's markup or spread, plus storage, insurance and administrative fees, and possibly taxes and penalties when money comes out of a retirement account (Commodity Futures Trading Commission). Fees vary widely by provider, so we do not quote typical numbers; ask for every fee in writing.
Main risks. High markups are the biggest. The Commodity Futures Trading Commission says some gold or silver IRA fraud victims had one-third to one-half of their savings drained by fees and markups, and that it might not make sense for someone near retirement to roll over an account and pay high fees to buy large amounts of bullion (Commodity Futures Trading Commission). In a 2023 case the Securities and Exchange Commission alleged that one dealer told retirement savers its markup was 1 to 5 percent while actually charging as much as 130 percent (Securities and Exchange Commission). The other risk is a rules mistake: keeping account metal at home was treated as a taxable distribution in McNulty v. Commissioner (2021) (United States Tax Court opinion).
Option 2: physical gold you hold yourself
This is the oldest route: buy coins or bars from a dealer, then store them at home, in a bank safe deposit box or with a private vault.
What it can offer. Direct ownership with no fund manager or retirement custodian in between, and no ongoing account fees unless you pay for storage.
What it costs. Every dealer sells above the spot price and buys back below it. The Commodity Futures Trading Commission calls the gap the dealer's spread and notes that each dealer sets its own, so it pays to shop around; it adds that fraudulent dealers have charged spreads of more than 300 percent while other dealers charge less than 20 percent (Commodity Futures Trading Commission). In a 2020 advisory it described bullion as priced at the spot price plus a markup or premium of between 5 and 10 percent, while customers are often encouraged to buy collectible coins with premiums of 40 to 200 percent above spot (Commodity Futures Trading Commission). Those are ranges reported by a regulator at the time, not a quote for today. Storage and insurance are your own costs. Our guide to spot price versus premium explains how to check what you are paying.
Tax. Outside a retirement account, the Internal Revenue Service treats gold as a collectible: net capital gains from selling collectibles are taxed at a maximum 28 percent rate (Internal Revenue Service, Topic 409).
Main risks. Overpaying on the way in, being offered less than expected on the way out, theft or loss, and buying "rare" coins at collector prices. The Commodity Futures Trading Commission says "semi-numismatic" is a made-up industry term with no special meaning (Commodity Futures Trading Commission).
Option 3: a gold exchange-traded fund
A physically backed gold exchange-traded fund is a trust that holds gold bars in a vault and issues shares that trade on a stock exchange. Two of the largest United States examples show how they work.
SPDR Gold Shares. The fund's stated objective is for the shares to reflect the price of gold bullion, less the trust's expenses. Its website lists an expense ratio of 0.40 percent, names JPMorgan Chase Bank, N.A. and HSBC Bank plc as gold custodians, and says an independent firm, Bureau Veritas, conducts two gold counts each year at the custodians' vaults (SPDR Gold Shares). Its tax frequently-asked-questions document explains that the net asset value is based on the ounces the trust owns valued at the London afternoon benchmark price, and that the trustee deals only with "Authorized Participants" in blocks of 100,000 shares, so an individual wanting physical gold in exchange would have to make arrangements through a broker (State Street Global Advisors, GLD frequently asked questions).
iShares Gold Trust. Its page lists a sponsor fee of 0.25 percent and warns that the amount of gold represented by each share will decrease over the life of the trust because gold is sold to pay the fee and expenses. It also says shares trade at market price rather than net asset value, that brokerage commissions reduce returns, and that shares are not insured by the Federal Deposit Insurance Corporation (iShares).
Tax. In a taxable account, the GLD document says that gains on shares held for more than one year are generally taxed at a maximum 28 percent rate because the trust's gold counts as a collectible, rather than the 20 percent rate for most other long-term gains (State Street Global Advisors). Inside an individual retirement account, retirement account rules apply instead. The Commodity Futures Trading Commission notes you might be able to add exchange-traded products to an existing individual retirement account (Commodity Futures Trading Commission).
Main risks. Gold price moves, the slow drag of annual fees on the gold per share, the share price drifting from the value of the gold behind it, and reliance on the trust's custodians. The GLD document says custodian liability is limited and its insurance may not cover the full amount of gold held (State Street Global Advisors).
Questions that separate the three
Instead of asking "which is best?", these questions tend to make the trade-offs clear:
- Do I need the metal in my hands? Only the second option gives you that. An exchange-traded fund gives you price exposure, and a gold IRA keeps the metal with a trustee by law.
- Is this money already in a retirement account? If so, moving it into metal is a gold IRA or an exchange-traded fund held in that account. The rollover and transfer rules matter a great deal; see how a gold IRA works.
- What is my total cost? Add the premium, the spread you would lose if you sold the same day, and every yearly fee. Compare it with a fund's yearly expense ratio and trading costs.
- How would I sell, and to whom? Ask any dealer for its buy-back price before you buy, as the Commodity Futures Trading Commission advises. Exchange-traded fund shares sell through any brokerage account during market hours.
- Who is accountable if something goes wrong? Our checklist for checking a dealer or custodian shows where to look people up.
What none of them can do
None of the three removes gold price risk. Gold has had long rises and long falls; our guide to gold, inflation and interest rates shows several multi-year declines using official monthly data. To watch the price itself, the hourly gold dashboard shows an approximate spot price, the main key levels and the week's economic calendar.
Frequently asked questions
Is a gold exchange-traded fund the same as owning gold?
Not exactly. You own shares in a trust that owns gold. The trust's gold is held by custodian banks and only large Authorized Participants deal directly with the trustee, according to the fund documents linked above.
Can I hold a gold exchange-traded fund in my IRA?
The Commodity Futures Trading Commission says exchange-traded products might be added to an existing individual retirement account. Whether your provider allows a particular fund is a question for that provider.
Why is gold taxed at 28 percent?
Outside retirement accounts, the Internal Revenue Service taxes net gains on collectibles, including gold, at a maximum 28 percent rate. The GLD tax document applies the same rule to shares held more than one year. Your actual rate depends on your situation.
Which option has the lowest costs?
It depends on the products, the provider, how much you buy and how long you hold. Fund expense ratios are published; dealer premiums and custodian fees vary, so get them in writing and compare totals.
Sources
All accessed October 26, 2026.
- Commodity Futures Trading Commission and Financial Industry Regulatory Authority, 10 Things to Ask Before Buying Physical Gold, Silver, or Other Metals (issued March 20, 2024).
- Commodity Futures Trading Commission, Beware of Gold and Silver Schemes Designed to Drain Your Retirement Savings (2020 advisory).
- Securities and Exchange Commission, press release 2023-93 (May 15, 2023).
- Internal Revenue Service, Topic 409, capital gains and losses.
- Cornell Law School Legal Information Institute, 26 U.S. Code § 408.
- United States Tax Court, McNulty v. Commissioner, 157 T.C. No. 10 (November 18, 2021), opinion PDF.
- SPDR Gold Shares, GLD fund page, and State Street Global Advisors, GLD frequently asked questions.
- iShares by BlackRock, iShares Gold Trust fund page.
Education, not investment, tax or legal advice. Fund fees and tax rules change; read each fund's prospectus and check with a qualified professional before acting.
Not financial advice. This comparison describes how each option works in general. It is not investment, tax or legal advice and it does not say which option suits you. Costs and tax rules change; check the official documents linked below and talk to a qualified professional before you buy. Read the disclaimer.