When people think about investments, often one of the first things that come to mind is a vault filled with bars of silver or gold. For hundreds of years hoarding bars of precious metal was regarded as a solid strategy as they held intrinsic value from their use in jewellery and other industries. In 2021, however, although some gold and silver bugs remain, there’s a new way you can get your hands on large sums of gold and other commodities that don’t come with the same storage and trade requirements as investing in physical bars. Investing in gold through the stock market presents a phenomenal opportunity to invest in gold without the hassle of negotiating with brokers or the need for shopping around to find the best rates. Don’t get me wrong, physical investments still have their place, but for the vast majority of investors, it’s hard to argue with the convenience offered by investment into gold via the stock market.
We understand that for many, navigating the plethora of brokerages can be a perilous task. So to ensure our readers don’t get left committed to a subpar investment platform, we’ve created this guide explaining exactly how to invest in gold, the best brokerages to do so, and some of the advantages to an investment in digital gold.
#1 Broker to Invest in Gold Australia – eToro
How to Invest in Gold – Step by Step Guide 2021
Not everyone has the time to read through an entire article to find what they’re after, so to make sure we don’t leave anyone out, we’ve included this quick and easy guide on exactly how to invest in gold. If you’d prefer a more comprehensive guide, complete with pictures, you can find that toward the bottom of the page.
Step 1: Open an eToro account: Before you can start investing, you’ll need to register with a brokerage. We recommend eToro because they provide an excellent investment experience. All you’ve got to do to get started is type “eToro.com” into your browser, press “Join Now” and fill in the required fields.
Step 2: Verify your Identity: eToro is a regulated brokerage, while this provides plenty of benefits for investors, it does mean that you’ll have to verify your identity before trading. Luckily, it’s a simple process that only takes a few minutes. You’ll need a photo ID (passport, driving license) and proof of address (bank statement, utility bill).
Step 3: Fund your Account: Now that your account has been verified, you’ll need to fund it. All you need to do is click on the button marked “Deposit Funds”, enter the amount you plan on investing, and press “Deposit”. Your funds will be automatically credited to your account.
Step 4: Invest in Gold: After the funds have arrived in your account you’re ready to invest! Simply type “gold” into the eToro search bar, press ‘Trade’, enter the amount you’d like to invest, and press “Open Trade”. You’ll be able to monitor your investment at any time from the portfolio section of your account.
Choose a Broker
Before you delve headfirst into an investment, you’ll need to register with a well-known, high-quality brokerage. With all the contradictory information available, it’s easy to get confused by the offerings of different brokers. So to help our readers better understand the differences between the top 3 gold brokers we’ve created an in-depth review for each, enjoy!
1. eToro – Overall Best Gold Broker Australia
eToro is one of the largest brokers in the world, currently serving over 20 million users, considering they were only founded in 2007, we’d consider that to be an extremely impressive achievement. Overall, eToro provides investors with everything they need to succeed in one simple-to-use package.
Security at eToro is second to none, they’re regulated by ASIC, meaning the chance of something illicit taking place behind the scenes is massively reduced. SSL encryption has been implemented to ensure that investors’ data cannot be used if it gets intercepted while it makes its way to the eToro central server, something increasingly important as digital attacks become more common. On top of this, eToro gives users the option of enabling SMS 2-factor authentication, which results in you needing to input a code sent to your mobile device before you can complete sensitive account actions. This is a great last line of defense against someone gaining access to your account.
It doesn’t matter how good the security of a brokerage is, if they don’t have the features to back it up there’s little point trading with them. Therefore, we’re happy to say eToro is jam-packed full of features that will be useful to everyone. eToro users have access to advanced charting tools and a range of order types, meaning you can better execute your trading strategy of choice. CopyTrading allows users to automatically mirror the traders of experienced users, when using this feature you have access to various statistics about the traders, meaning you can find one that matches your own trading style. And to round off, eToro has a platform called eToro academy, which is an educational resource designed to help bring beginners up to speed with investment terminology and strategies.
Additional technical indicators would be nice
Lacking MetaTrader support
67% of retail investor accounts lose money when trading CFDs with this provider.
2. Capital.com – Top Gold CFD Broker Australia
Originally founded in 2016, Capital.com is the youngest platform on our list, but don’t let its age fool you, it’s an extremely powerful brokerage that has included features relevant to traders of all skill levels. It’s clear from the get-go that Capital.com has also taken special care to make sure its users have access to all the educational material they could ever need.
Security is especially important for new investment platforms, hackers will try and always try and test various exploits to see if they can find a weak spot to take advantage of. Capital.com seemingly understands this because their security is phenomenal. Like any modern, reputable brokerage they’re regulated by a leading authoritative body, in this case, ASIC. To protect customer data from being intercepted they utilize SSL encryptions, Transport Layer Security, which does a great job at preventing your data from falling into the wrong hands. Additionally, Capital.com takes data protection to the next level, by ensuring compliance with standards laid out by PCI Data Security.
If you’re looking for a platform that takes care to ensure its users are well-informed and have access to every resource needed for success, then Capital.com might be a perfect fit for you. Everyone investing with Capital.com is provided with access to a huge amount of educational material covering everything from the basics to advanced trading strategies. However, where Capital.com differs from other platforms is as well as offering a few guides, they’ve also created a dedicated educational app called Investmate, allowing users to learn how to trade while on the go. It’s clear Captial.com cares about educating its users, but what else do they offer? Well, Capital.com makes sure to provide users access to a range of markets, various technical indicators, and even full TradingView integration.
PCI Data Security compliant
Not available to US residents
76.72% of retail investor accounts lose money when trading spread bets and/or CFDs with this provider.
3. AvaTrade – Best Alternative Gold Broker Australia
If you’re not a fan of eToro or Capital.com, then the chances are that you might feel more at home on AvaTrade. They provide a “classic” trading platform while including heaps of modern features to make your life easier. AvaTrade was founded in 2006 and has since managed to garner an impressive 2 million users.
For an investment platform to last as long as AvaTrade has, they have to have top-tier security, without it they would’ve likely been left bankrupt by hackers long ago. As with the other two platforms on our list, AvaTrade complies with ASIC regulations and regularly undergoes audits to ensure there’s nothing strange going on in the background. 256-bit SSL encryption is used to prevent customer data from falling into the wrong hands and in theory, should take longer to decrypt than the equivalent 128-bit encryption. Another way AvaTrade prevents sensitive customer information from being obtained by criminals is with a piece of technology called McAfee Secure, which was created to protect important data like identity documents and card information.
And to round off, AvaTrade is both a fully-featured brokerage and extremely accessible. AvaTradeGo is their dedicated mobile trading platform designed to facilitate on-the-go trading, while not sacrificing capability. Combine this with the range of different accounts users can sign-up for (Islamic & professional) and it becomes clear AvaTrade cares about ensuring nobody is left out because of their needs. AvaTrade has taken a leaf out of eToro’s book by offering what they call ZuluTrade, an automated, social trading platform. It works in a similar way to eToro’s CopyTrading, but with a few additional features like ZuluGuard, a way of protecting users against signal makers’ strategy changes.
$50 after 3 months & $100 after 12 months
256-bit SSL encryption
15-year track record
UI becoming dated
Not available to US residents
Your Capital is at Risk.
Invest in Gold – Broker Price Comparison
With all the different offerings from brokerages, it can be difficult to understand how they stack up against one another, so to make it easier we created this table highlighting how the top 3 brokers compare in one metric I’m sure everyone will agree is important, fees.
$10 monthly (after 12 months inactivity)
$50 after 3 months & $100 after 12 months
What are Gold Stocks?
If you want to invest in gold, but aren’t a fan of how difficult it can be to store and trade physical gold, then investing in gold stocks could be perfect for you. They provide the same exposure to gold as a physical investment, but without any of the drawbacks. The price of gold is based on the value of one troy ounce, however, with gold stocks it’s far easier to buy smaller amounts because you can use fractional investing to purchase a percentage of a troy ounce, massively reducing the barrier to entry. This results in a far more streamlined investment experience, accessible to a greater number of people. When investing in gold stocks you have a few options, you can either invest in regular gold stock, an exchange-traded fund, or a contract for difference. To help our readers make an educated choice on which option is best for their needs, we’ve included a breakdown of what an ETF & CFD actually is.
ETFs (Exchange-Traded Funds)
An ETF otherwise referred to as an exchange-traded fund is a group of related assets that have been bundled together by a brokerage or fund manager. Oftentimes an ETF is designed to mirror the performance of a certain index (e.g. the S&P 500). Investing in an ETF provides you exposure to a large variety of assets, this is beneficial for investors wanting to minimize risk, as, in the event of one company going bankrupt, the performance of the others should balance it out. This ensures that you won’t lose a large portion of your portfolio from the failings of a single company. When you invest in an ETF you are not buying the underlying assets, because of this you rarely retain voting rights, however, it is common for a brokerage to pass any dividend earnings onto the investor. Overall, we’d say investing in a gold ETF could be perfect for anyone wanting to reduce their risk exposure and enjoy a relatively stable investment.
CFDs (Contract For Difference)
If you’re looking for a higher-risk, higher reward investment option, then investing in a CFD could be the perfect match. CFDs differ from regular stocks and ETFs as they’re considered speculative investments, meaning you’re simply speculating on whether an asset will increase or decrease in value, rather than investing for the long term. Although it comes with greater risk, there are several advantages to investing in a gold CFD. Firstly, because you’ll typically be trading over a short time frame, you’ll need to use leverage to magnify your profits. Most CFDs are leveraged instruments, meaning you have the potential of earning huge profits in very little time. While access to leverage can be hugely beneficial, it’s advisable to only use it if you have previous trading experience because it also amplifies your losses, meaning you could end up losing even more than initially invested. If you invest in a gold CFD, you don’t own any of the underlying assets.
Best Ways to Invest in Gold
As we’ve discussed there’s plenty of different ways you can invest in gold, but you should know they’re not all equal. If you’re wondering what the best way of investing in gold is, the answer will depend on your individual investment goals and strategies. However, to ensure our readers aren’t left in the dark, we’ve broken down some of the best ways to invest in gold right now.
Invest in Gold Bullion
Investing in physical bullion can be viewed as the “classic” way of investing in gold, you exchange money for a tangible asset. For many, nothing can trump this way of doing things, after all, not a lot of people jump at the idea of money for numbers on a screen. If this sounds like you, then the chances are an investment into gold bullion will serve you best. That being said, we only advise this method for people looking for a long-term investment as physical gold is far harder to trade than stock. You should also carefully consider how you’ll store your gold, as something like a safety deposit box can seriously hurt profits, especially on smaller investments.
Invest in Gold Stocks/CFDs/ETFs
Investing in gold using a brokerage or stock exchange is an excellent option for the vast majority of investors. This is because you don’t have to contend with any storage-related issues and it’s far easier to frequently buy and sell than its physical counterpart. Additionally, there are multiple ways to invest in gold stocks, so regardless of your goals, you’ll likely be able to find an investment that’s right for you.
Stocks: Investing directly in gold stocks is a great option for the long-term investor that would like direct exposure to gold as an asset. When purchasing a gold stock you don’t have to worry about complex financial processes, it’s really as simple as buying and selling at a time convenient for you.
CFDs: Investing in a gold CFD is the best option for those looking for a short-term investment. CFDs are considered to be higher risk than an ETF or stock, however, this is offset by the potential for greater profit.
ETFs: If you’d prefer a more stable, lower-risk investment, then it’s hard to beat an ETF. They provide exposure to a variety of assets, meaning you’re far less likely to face catastrophic losses. On the downside, you’re less likely to experience parabolic growth, meaning it’s best suited for large investments over a long period.
Is Gold a good investment?
Gold is one the most popular investments in the world and it’s easy to see why. You can invest in gold in many different forms, meaning there’s something for everyone. And due to the high demand for gold, you’re pretty much always able to easily sell it, regardless of which form you have.
Supply and demand is a basic economic principle, the greater the demand and the lower the supply, the higher the price will be. Eventually, there won’t be any gold left to mine, and considering gold is an asset with huge global demand, it would make sense for the price to skyrocket. Meaning it could be extremely worthwhile to build a position now before scarcity increases further.
Store of Value
For years, gold has been viewed as a store of value and a hedge against inflation. Because of its extremely high liquidity, gold provides investors with a great way to store the funds, ensuring inflation doesn’t devalue your capital. Storing your money in a way that beats inflation is key to building wealth.
Investing in Gold – What are the Risks
Risks are and always will be a part of investing, as such, you should always consider how they’ll affect your investment. Below, we’ve provided a quick rundown on some of the main disadvantages of an investment in gold.
If you take a look at a chart of how gold has performed over the last 10 years, it doesn’t read particularly well. In fact, if you invested $10,000 in gold 10 years ago it would only be worth around $12,500 today. Compare this to an investment in a company like BHP Group (Australia’s largest company) which would be worth almost $15,000, and suddenly gold loses some of its charms.
When investing in a company’s stock, the chances are, you’ll receive some form of dividend payment. This is essentially interest paid on top of your investment. If you’ve got a reasonable sum invested, these dividend payments can be quite large, and a great form of passive income. Even if an asset isn’t performing well, the dividend payments can often balance things out. If you choose to invest in gold, you won’t receive any dividend payments, instead, you’ll be relying solely on the price of gold increasing. While this isn’t necessarily a negative, you should always consider if you’ll experience better returns by investing elsewhere.
How to Invest in Gold with eToro
We understand how difficult it can be to start investing with a new brokerage, so to ensure our readers have an easy time we’ve created this comprehensive guide detailing exactly how to invest in gold.
Step 1: Open an account with eToro
Before you can invest, you’ll need to create an account with top-rated broker eToro. To do this simply type “eToro.com” into your browser’s search bar, press “Join Now”, and fill in the required information.
Step 2: Verify your account
As a regulated broker, eToro users benefit from massively increased security, however, this does mean that you’ll have to verify your identity before trading. Luckily, this process is quick and easy, all you’ll need at hand are a photo ID (passport, driving license) and proof of address (bank statement, utility bill).
Step 3: Fund your account
Now that you’ve verified your eToro account you’re only got one more step to complete before investing! You’ll need to fund your account using either a credit/debit card, bank transfer, or e-wallet. To do this just click on the button marked “Deposit Funds”, enter the amount you’re planning on investing, and press “Deposit”. Your funds will be automatically credited to your account.
Step 4: Buy some gold!
Now that your account is funded, you’re ready to make your first investment! All you’ve got to do is type “gold” into the eToro search bar, select the relevant option and press “Trade”, enter however much you want to invest, and press “Open Trade”. You’ll be able to view and control your investment from the portfolio section of your account.
To briefly summarize, gold has been seen as a solid investment for years, and in 2021, not much has changed. It’s a powerful store of value and can provide investors with an excellent way of building wealth. That being said, if you’re looking for a get rich quick scheme you’ll likely be disappointed with the returns offered by direct investment into gold. However, because gold offers multiple ways to invest, there’s something for everyone, regardless of your goals. If you’re not quite sure which way of investing in gold is right for you, then using a brokerage that supports all methods makes sense. One such broker is eToro, they offer users an extremely intuitive interface, watertight security, and a powerful set of features, perfect for any investor! On top of this, they offer commission-free investing so you won’t be left with a nasty surprise when you see your final balance. All in all, hold provides an incredible array of opportunities, especially when combined with a top-quality brokerage like eToro.
eToro – Best Platform to Invest in Gold
What is a Gold CFD?
A CFD is a way of speculatively investing in gold. It’s a great option for anyone looking for a leveraged, short-term investment.
What is a Gold ETF?
An ETF is a group of related assets bundled together by a fund manager or broker to allow for easy investment.
Should I buy Gold bullion?
The answer to this question depends on your investment goals. If you want a long-term tangible asset then bullion is hard to beat.
Gold Bullion vs Stocks
Both methods of investment provide the same end result, exposure to gold. Therefore you should consider which investment type will benefit you as an individual more.
What’s The Best Gold Broker?
At Economy Watch, we’ve compared the merits of hundreds of brokers. There was one clear winner, eToro.
About Jay Leonard PRO INVESTOR
Jay is a UK based cryptocurrency expert, specialising in fundamental analysis and medium to long term investments. He has a great deal of hands on experience in the space and a current focus on institutional adoption.
Phillip Peters is an independent journalist, entrepreneur, digital marketer and press release publisher. He has a soft spot for technology, gadgets, cryptos and writing about health and politics. He also loves travelling the world! Phillip has been working with KukaUSA full time since September 2018.