Buying gold — the complete guide

Gold is one of the few assets a private buyer can hold in a hand, weigh on a kitchen scale and verify without asking anyone's permission. That physicality is the attraction, and it is also where the costs hide. What follows is arranged in the order the decisions arrive.

Five steps to buying gold

For readers in a hurry, this is the thread of the whole guide. Each step is explained in detail further down and linked from here.

1. Set the purpose and the share. Gold is a diversifier at roughly 5 to 10 per cent of investable assets, and it belongs after an emergency fund and after clearing expensive debt. See Does gold make sense, and how much?
2. Choose the form. Physical metal for direct ownership, an exchange-traded commodity for a brokerage account. If physical: coin or bar, and the right unit size. See Coin or bar? and Physical, ETC or ETF?
3. Check the channel and the seller. Online dealer, local dealer, bank or over-the-counter cash purchase — compare the total price including shipping against the current metal value. See Where to buy gold
4. Buy, and keep the paperwork. Watch the premium, and file the purchase receipt: it is the proof of the holding period and it raises the price you get back later. See The premium and the spread
5. Verify and store. Check the piece against its reference specifications, then decide between home storage, a safe deposit box and a bonded warehouse. See Checking authenticity and Storing gold safely

The current price per ounce and per gram is on the gold price page, and every figure here can be recalculated with the gold calculator.

Does gold make sense, and how much?

Gold is not a return generator; it is a stabiliser. It pays no interest and no dividend, it produces nothing and it employs nobody. What it has done, over long stretches of history, is hold purchasing power through currency reforms, banking failures and wars — which is a different job from the one shares and bonds do, and that difference is precisely why the two combine well.

The share most consumer organisations and independent advisers arrive at is 5 to 10 per cent of investable assets. The reasoning is not that gold is expected to outperform; it is that a modest allocation reduces the swing of the whole portfolio, because gold's price tends not to move in step with equity markets. Anything beyond about 15 per cent turns a stabiliser into a concentrated bet on one metal quoted in one currency.

Two things belong before the first purchase: an emergency reserve of three to six months of expenses in cash, because gold sold in a hurry is gold sold badly, and freedom from expensive debt, because no realistic return on metal beats the certain cost of a consumer loan. Once both are in place, gold becomes what it is good at being — the part of the portfolio that is not a promise from anyone.

When is a good time to buy?

The honest answer first: nobody hits the perfect entry point reliably, and that includes banks, funds and the people who write newsletters about it. Waiting for the right moment usually costs more than it saves, because the price of waiting is paid in missed years rather than in visible losses. This guide gives no price forecast, on principle.

The standard way out of the timing trap is not to buy everything at once. Regular purchases — monthly, quarterly, whatever the budget carries — average the entry price: when the price is high the same money buys less metal, when it is low it buys more. That is the cost-average effect, and a gold savings plan is simply a formalised version of it. For a single larger sum, splitting it into three or four tranches over some months achieves the same thing without any product wrapper. The savings plan calculator shows how the averaged purchase price develops over time.

Rather than predicting the price, it helps to understand what moves it. Gold tends to firm when the real interest rate is low, because the opportunity cost of holding a non-yielding asset falls; when the US dollar weakens, because gold is quoted in dollars; and when demand for safe assets rises. Central bank buying has supported the market for years. These are explanations, not predictions.

There are also recurring seasonal patterns in the gold price — documented in the data, but never a guarantee for the year ahead. The seasonality page shows month by month how ordinary or unusual a given move really is, and the historical prices put the current level into a multi-decade context. For anyone holding for years, a low premium matters more than the exact price on the day.

Drawbacks and risks, honestly

A serious purchase decision needs the downsides, and advertising pages tend to leave them out.

• No running income. Gold pays neither interest nor dividends. Unlike a share or a bond, the capital does no work while it sits there; the entire return has to come from the price.
• Real volatility. The gold price can move sideways or downwards for years at a time. Over short horizons gold is not a "safe" asset in any meaningful sense — it is simply a different risk from the one held in equities.
• Currency risk. Gold is traded in US dollars. For a buyer whose spending is in euros, pounds or Swiss francs, a falling dollar can eat a rising metal price entirely. The exchange rates page makes that second layer visible.
• The spread. Between the buying price and the selling price sits a gap that has to be earned back before the position is even. On small units that gap can be a year's worth of price movement.
• Storage and insurance cost. Physical metal wants to be kept securely and, above a certain value, insured. Both reduce the net return, and both are easy to underestimate at the outset.
• Nothing to analyse. There is no annual report, no earnings call and no cash flow. Valuation arguments about gold are arguments about sentiment and macro conditions, which is why they never settle.

None of this is an argument against gold. It is an argument for using it deliberately and in limited size: at 5 to 10 per cent these drawbacks are barely felt, while as a main holding they dominate everything else.

Coin or bar?

The most important point first: at the same fine weight the pure gold value is identical. A one-ounce coin and a one-ounce bar contain the same metal and are worth the same at the melt. The difference lies entirely in the premium and in how the piece behaves in practice.

Bars usually carry the lower premium, and the larger the bar, the cheaper the gold per gram. The trade-off is divisibility: a bar is one unit, and selling half of it is not an option. Bars from recognised refiners come sealed in a certified blister with a serial number, and keeping that packaging intact matters for resale.

Bullion coins — investment coins — are minted to fixed specifications, recognised worldwide and checked by any dealer in seconds. That recognition is what makes them liquid: the buy-back discount on a well-known one-ounce coin is typically the smallest in the market, and they divide a holding into sensible portions. Both forms qualify as investment gold and are exempt from VAT across the European Union.

The four most widely traded one-ounce coins, for comparison:

All four contain exactly one troy ounce of fine gold, so the metal value is the same in every row. The Krugerrand and the American Eagle are 22 carat: the extra weight is copper added for scratch resistance, and the gold content is still a full ounce. Fineness alone therefore says nothing about value — only fine weight does.

Choosing the right unit size

The smaller the unit, the higher the premium in percentage terms. A tenth-ounce coin costs noticeably more per gram than a full ounce, because minting, packaging and distribution cost roughly the same per piece regardless of how much gold is inside; that fixed cost is simply spread over less metal. The effect is steep at the bottom end and flattens out above one ounce.

Rule of thumb: buy the largest unit that fits both the budget and the way the holding is likely to be sold, and add a few small units for flexibility.

The conflict, stated plainly. On pure arithmetic the largest unit always wins: a one-kilogram bar carries a fraction of the premium of thirty-two tenth-ounce coins. But a single large bar cannot be divided. Anyone who needs a modest sum has to sell the whole thing, at whatever price happens to prevail that week, and take the tax consequences of the entire position at once. Small units cost more and give flexibility in return. There is no correct answer, only a mix: the bulk in larger units for the best price per gram, plus a handful of small units as a divisible reserve. How heavily to weight each side depends on whether the purpose is long-term storage of value or availability at short notice.

The gold calculator works out the metal value for any weight, fineness and quantity, and the unit converter translates between troy ounces, grams and the older weights still printed on some older bars.

Scrap gold, broken gold and jewellery

Not all gold is investment gold. Jewellery, dental gold and broken gold are alloys with a much lower gold content — 333, 585 and 750 parts per thousand are the common European values, corresponding to 8, 14 and 18 carat. The pure gold value depends solely on the fine gold contained, never on the gross weight.

Fineness × weight × price per gram = material value. A ten-gram ring in 585 gold contains 10 g × 0.585 = 5.85 g of fine gold, and that is what a refiner pays for, less a processing margin.

For buying, the consequence is blunt: jewellery is not investment gold. It falls outside the VAT exemption, so in Germany it carries the full 19 per cent VAT plus a substantial mark-up for design and craftsmanship. On the way out only the material value usually counts — the craftsmanship is rarely paid for twice. That is not an argument against owning jewellery, only against buying it as an investment.

Anyone selling old or broken gold should know the material value before accepting an offer. The melt value calculator computes it from fineness and weight, and the dental gold calculator handles the mixed alloys used in dentistry, where platinum group metals and silver are often part of the mix.

Physical, ETC or ETF?

Gold exists as metal and as a security — the latter often called paper gold. The forms differ in ownership, in risk and, under German law, in tax treatment.

* For physically backed ETCs that carry a claim to delivery, such as Xetra-Gold or Euwax Gold, the German Federal Fiscal Court has confirmed equal treatment with physical gold (Eighth Senate, 2015, most recently confirmed in 2021). This is a German ruling on German income tax and says nothing about the treatment in other jurisdictions.

Costs and delivery. An ETC is not free either. Besides the bid-offer spread there is an ongoing custody fee, around 0.3 per cent a year for the best-known German product; over a ten-year holding period that compounds into a real difference against a one-off premium paid on a bar. The delivery claim is genuine but conditional: physical delivery costs extra and is usually tied to minimum quantities, often multiples of 100 grams, and some issuers deliver only to the custodian bank. A fair comparison has to include both the running fee and those one-off costs.

The choice follows from the purpose. Anyone who wants the metal in hand, available without a counterparty, has no substitute for physical gold. Anyone who only wants exposure to the price will find the securitised route cheaper and far less trouble.

The premium and the spread

The purchase price is always above the pure metal value. That difference is the premium, and it covers refining, minting, distribution, insurance in transit and the seller's margin. Equally important is the spread: the gap between what a dealer sells at and what the same dealer buys back at. On resale you generally receive slightly less than the spot price; on standard bars and well-known coins that discount is smallest, because the dealer can move them again immediately.

As an orientation, the buy-sell spread on a full ounce is often in the low single-digit percentage range, while on very small units it can reach around 20 per cent. Put the other way round: a tenth-ounce coin may need a 20 per cent rise merely to break even, a kilogram bar perhaps 3 per cent. That single fact is the strongest argument for buying larger units.

The premium calculator takes an offer price and shows how far above spot it sits — the only comparison that means anything when two dealers quote different products.

The same size effect explains why group orders exist — several buyers pooling an order to reach a cheaper weight band. The saving is real, but the legal detail is awkward: in Germany the cash identification threshold applies per transaction, the goods have to be unambiguously allocated to each participant, and the later division has to be documented cleanly for tax purposes. For most people, buying one larger unit alone is simpler than organising a pool.

Buying anonymously: the German cash threshold

In Germany, gold can be bought for cash without any identification up to 1,999.99 euros. From 2,000 euros the dealer is obliged under the Money Laundering Act to record an identity document. This kind of walk-in cash purchase is known as an over-the-counter cash transaction. The threshold was lowered in 2020, from the 10,000 euros that had applied before.

Two qualifications matter. First, the limit applies per transaction, and deliberately splitting a larger purchase to stay underneath it is prohibited under the Money Laundering Act; connected purchases are added together, and dealers must watch for exactly that pattern. Second, anonymity ends the moment money moves through a bank: any transfer or online purchase is documented by definition.

This threshold is German. Other EU member states set their own cash identification limits, and several have general caps on cash payments of any kind that are lower than the German figure. The EU-wide cash payment limit of 10,000 euros agreed in the 2024 anti-money-laundering package sets a ceiling, not a floor — national rules may be, and often are, stricter. Anyone buying abroad should check the rule in that country before travelling with cash.

Anonymity, finally, is neither a statement about the legality of the money nor a tax exemption. A purchase that leaves no paper trail also leaves no proof of the purchase date — which, as the next section shows, is exactly what is needed later to sell without tax.

Tax on buying and selling in Germany

On purchase. Investment gold is exempt from VAT throughout the European Union, implemented in Germany in section 25c of the VAT Act. The exemption covers bars from a fineness of 995 upwards and listed investment coins — at least 900 fineness, minted after 1800, and legal tender, or formerly legal tender, in their country of origin. Silver, platinum and palladium are not exempt: in Germany silver carries 19 per cent VAT, or is sold under the margin scheme, which is one of the most consequential differences between gold and the other metals. The silver price page and the gold-silver ratio put that difference in context.

On sale. Under German law a gain is entirely free of income tax once the metal has been held for more than one year — a private disposal transaction under section 23 of the Income Tax Act, usually called the speculative holding period. Sold inside the year, the gain is added to income and taxed at the personal rate, with an annual exemption limit of 1,000 euros covering all private disposals together. That figure is an exemption limit, not an allowance: exceed it by one euro and the whole gain becomes taxable, not just the excess. Where several purchases exist, the first-in-first-out principle applies — the oldest holding counts as sold first.

All of this is German law and none of it transfers automatically. Other European countries use entirely different models: some exempt private gains outright, some apply a flat rate at sale, some tax the full proceeds rather than the profit. The tax estimator applies the rules of the selected country and is the right place to check a specific case.

The practical consequence is the same everywhere: keep the purchase receipts. Without a dated document, the holding period cannot be proven, and a sale that should have been tax free turns into a dispute with the tax office.

Storing gold safely

Three routes, with different compromises between availability, cost and insurance.

With home storage the standard household contents policy covers valuables only up to a low sub-limit — often a small percentage of the sum insured, and lower still if the items are not in a certified safe. Beyond a token holding this means a tested safe of an appropriate resistance grade, properly anchored, plus an explicit agreement with the insurer. The advantage is absolute: no third party, no opening hours, no counterparty.

A safe deposit box removes the metal from the home, but bank liability for the contents is typically limited to a modest amount and the contents are not automatically insured. Access is restricted to branch hours — exactly the constraint that matters in the scenarios people buy gold for.

A bonded warehouse stores metal outside the customs territory, professionally secured and insured, and is the usual route for larger holdings and for silver, where the VAT deferral is an additional benefit. The trade-off is a running fee and a dependency on the operator.

Whichever route is chosen, an inventory list belongs with it: piece, fine weight, purchase date, price and location. It is what an insurer asks for after a loss and what an heir needs in order to find the holding at all.

Checking authenticity

Common bullion coins are minted to exact specifications, and gold is not magnetic. If diameter, thickness and weight all match the reference values and the coin shows no reaction to a strong magnet, the great majority of counterfeits are already excluded. The reference values for the best-known one-ounce coins:

The decisive additional test is density. Pure gold has 19.32 grams per cubic centimetre, higher than nearly every alloy a counterfeiter would use, so a piece with the correct weight but the wrong dimensions is immediately suspect. The one metal that comes close is tungsten, at 19.25, which is why larger bars deserve extra care: check the refiner, the serial number and the certificate, keep the original blister sealed, and for high values use an ultrasound or X-ray fluorescence test — both quick, non-destructive and widely available.

Three tools cover the routine checks: the coin authenticity checker compares a piece against the stored specifications, while the coin weight checker and the coin size checker handle weight and dimensions individually. A caliper accurate to a tenth of a millimetre and a scale accurate to a hundredth of a gram cost very little and pay for themselves the first time they are used.

Where to buy gold

Gold reaches a private buyer through four channels, with different compromises between price, anonymity and advice. We recommend no individual seller; what matters is that price and seriousness are compared independently, which the next section covers.

For price alone, online dealing generally leads: the business is high volume, low margin and the competition is visible. For anonymity and immediate possession, the local cash purchase wins. Banks are rarely competitive on the metal itself, though they remain relevant for storage. Private marketplaces are where almost every counterfeit story starts.

Whatever the channel, compare the total price including shipping and insurance against the current metal value rather than against another dealer's headline. The melt value calculator provides that neutral baseline.

Recognising a reputable dealer

We deliberately recommend no individual dealers. These neutral characteristics sort most of the market without one.

• Transparent pricing. Premium and buy-sell spread are stated openly, and the buy-back price is published alongside the selling price rather than hidden behind an enquiry form.
• Prices in line with the market. The quote sits close to the current spot price. An offer noticeably below the metal value is a warning sign, not a bargain — nobody sells gold at a loss for a stranger's benefit.
• A complete legal notice. A verifiable company name, a fixed business address, a commercial register entry, and no advance payment to a private bank account.
• No pressure. No countdown offers, no price forecasts, no "today only" framing and no unsolicited telephone follow-up.
• Traceable goods. Well-known mintings, sealed blisters with serial numbers for bars, and a clear statement of what is being sold, including the fine weight rather than just the gross.
• A functioning buy-back. A dealer who publishes a buy-back price is a dealer who expects to be there when you sell.

Common mistakes when buying gold

These are the mistakes that cost the most money, and every one of them is avoidable.

• Units too small. Buying many small pieces instead of one large one. The percentage premium quietly consumes the return before the price has moved at all.
• Ignoring the premium. Looking only at the metal value and overlooking the mark-up. Two products with identical gold content can differ substantially in price, and the difference is invisible unless it is calculated.
• Collector coins bought as an investment. Numismatic pieces carry a collector's premium that reflects rarity and condition, not metal. That premium frequently disappears at resale, because the next buyer is a dealer pricing the gold.
• Emotion instead of a plan. Buying expensively in a panic and selling nervously in a drawdown. A fixed target share and regular purchases remove most of that decision.
• Lost paperwork. Without a purchase receipt the German one-year holding period is hard to prove, and a sale that should have been tax free becomes a dispute.
• An unsafe channel. Unbeatable offers on private marketplaces without verification. This is the single most common entry point for counterfeits.

Selling gold again

Selling is buying in reverse, and the same channels are open: online buy-back, local dealer, refinery. What decides the outcome is the buy-back price relative to spot — you generally receive slightly less than the spot price, and the discount is smallest on standard bars and well-known coins.

• Compare several offers. Buy-back discounts differ far more between dealers than selling prices do, because fewer people compare them. The purchase price calculator gives a realistic expectation before the first enquiry.
• Sell the liquid pieces first. Well-known bullion coins and standard bars are bought back fastest and at the smallest discount. Unusual formats take longer and cost more.
• Mind the holding period. Under German law, more than a year makes the gain tax free, so check the purchase dates before selling; first-in-first-out decides which pieces count as sold. The tax estimator runs the case for the selected country.
• Have the documentation ready. Original packaging, sealed blister and certificate raise the buy-back price and shorten the verification, because the dealer's own testing cost falls.
• Avoid selling under time pressure. The worst prices are accepted by people who need the money this week — which is what the emergency fund at the start of this guide is for.

Gold as protection against inflation

Gold is widely described as protection against currency debasement. Over long horizons that holds: across centuries, an ounce of gold has broadly retained its purchasing power while paper currencies have not. Over individual decades it emphatically does not hold — the stretch from 1980 into the early 2000s produced deep real losses for anyone who bought at the peak, and the metal took a quarter of a century to recover in real terms. As a short-term hedge against a specific year's inflation rate, gold has no reliable record at all.

The real returns are modest when measured honestly. Long-run studies consistently show substantially less real return for gold than for broad equity markets, which is the expected result: gold produces no earnings to reinvest. The drivers of its price are the real interest rate — low rates reduce the disadvantage of holding a non-yielding asset — the external value of the US dollar, and demand from central banks, which have been net buyers for years and now hold a significant share of annual supply.

This is why gold fits as a stabiliser and a crisis component rather than an engine of return, and why the 5 to 10 per cent figure keeps reappearing in independent recommendations. The fear and greed index puts a given move into context, and the historical prices show what "long term" has actually meant.

Inheritance, gifts and customs

Inheritance and gifts. Gold counts as part of an estate like any other asset. In Germany, gifts and inheritances are free of tax within allowances that renew every ten years: 500,000 euros for a spouse, 400,000 euros per child, 200,000 euros for a grandchild and 20,000 euros for everyone else. Within those limits the transfer costs nothing; above them the rate depends on the tax class and the amount. Because physical gold can be handed over without any register recording it, the temptation to skip the declaration is obvious — and so is the problem it creates, since an undocumented holding has no provable acquisition date. Allowances differ in every other country.

Customs and travel. Investment gold itself is not subject to customs duty. At a border, however, gold bars from 99.5 per cent fineness and gold coins from 90 per cent gold content count as cash equivalents under EU rules. From a total value of 10,000 euros, an unprompted written declaration is required when crossing the external border of the European Union; within the EU there is a duty to disclose on request. This is not a tax and not a restriction on ownership — it is a monitoring measure against money laundering, and failing to declare is penalised even when the metal is entirely legitimate. Keep the purchase documentation with the metal when travelling.

In short: gold is a stabiliser, not a return generator, and it works best as a limited share of a portfolio held for years rather than traded. The two numbers that decide the outcome are the premium paid on the way in and the discount accepted on the way out — both of which shrink as unit size grows. Everything else, from storage to tax, follows from the decision to hold the metal itself rather than a claim on it.