How to invest in gold in Australia

Much like investing in silver, gold has a long history as currency, a store of value and, for many Australians, a portfolio diversifier alongside their shares, ETFs and cash. If you’re interested in learning how to invest in gold in Australia across physical bullion, exchange-traded funds (ETFs) and gold-related shares, we’re here to explain the drivers of gold prices, as well as give you some handy steps to get started.

Key takeaways

• There are three main ways to gain exposure to gold: buy physical bullion, invest via gold ETFs or purchase gold-related shares (e.g. mining companies). Each one has different costs and risks to think about.

• Gold prices respond to supply and demand dynamics, as well as macro forces like central-bank reserves, global production, industrial and jewellery demand, and movements in the US dollar.

• If you’re exploring how to invest in gold in Australia, start by learning how share investing works. Pick a reputable platform like CMC Invest, make your first purchase according to your risk tolerance and then plan for secure storage (for bullion) or ongoing management (for ETFs and shares).

Ways to gain exposure to gold

1. Physical gold

How it works

Buying physical gold means purchasing the metal itself – as coins or bars – and holding it yourself. Your exposure tracks the spot gold price, adjusted for the premium you pay over spot when buying and any discount when selling. Some investors like that it’s a ‘no issuer risk’ form of ownership and there’s tangibility in holding metal.

Where to buy in Australia

Australian investors look to the government-owned Perth Mint and reputable bullion dealers. If you choose this route, make sure you take the time to compare product premiums, buy-back policies, identity requirements and delivery or collection options. Ensure you’re comfortable with authentication procedures before you commit.

Pros

• Direct ownership with no ongoing fund fees.

• Can be held long-term as part of a diversified reserve.

Cons

• Buying and selling typically require visiting a dealer and incur transaction costs (like premiums) that are generally much higher than methods such as investing via a gold ETF.

• Storage, insurance and logistics are your responsibility.

• Liquidity can be lower than ETFs in fast markets.

2. Gold ETFs

What they are

Gold ETFs offer exposure to the approximate price of gold through a single trade. Some funds hold physical gold, while others use derivatives to seek to replicate gold price movements. You don’t need to arrange vaulting or insurance yourself, and you can buy or sell units on the exchange during market hours like any other listed security. The Global X Physical Gold ETF (GOLD) is an example of a fund backed by physical bullion stored in secure vaults, offering investors a simple way to gain exposure to the metal’s spot price.

How to buy

Open a brokerage account, search the ETF code, read the PDS, review all the fees and structure and then place an order. If you’re new to investing, CMC Invest has a wide suite of research and guides available to help you understand how it works and what to consider before adding an asset to your portfolio.

Pros

• Convenience – no personal storage or insurance needed.

• Depending on your broker, you may benefit from low brokerage fees.

• Tracks the gold price with portfolio-level transparency.

Cons

• Management fees apply, as ETFs are managed products with ongoing costs for administration and storage.

• The ETF price may not move exactly in line with the spot gold price because of expenses, supply and demand, or how the fund is structured.

• You don’t hold the physical metal yourself, so your exposure depends on the fund and its custodian rather than owning gold directly.

3. Gold stocks

What they are

‘Gold stocks’ broadly refers to companies involved in the gold industry, from miners and explorers to refiners. These shares can be leveraged to movements in the gold price (a company’s share price and profits may fluctuate more than the metal itself) and are also influenced by company-specific factors such as production volumes, costs, ore grades and capital allocation.

How to buy

Use a share trading platform like CMC Invest to research and buy ASX-listed gold companies, or look into international listings if that’s what best suits your strategy.

Pros

• Potential for dividends and growth beyond spot gold movements.

• Positive company news (discoveries, expansions, cost improvements) can add real value.

• Straightforward brokerage purchase with no physical storage needed.

Cons

• Company risk (operational, financing, geology).

• Can be more volatile than gold itself.

• Sector cycles and commodity prices can drive large swings.

How are CMC Invest clients investing in gold?

What factors affect gold prices?

Industrial demand

Gold has industrial uses (electronics, dentistry, aerospace), but, unlike silver, a much larger share of demand comes from jewellery and investments (bars/coins/ETFs). Cycles in manufacturing and consumer spending can have an influence on demand, as can investor flows looking for diversification or any perceived defensive assets.

Global production

Mine production (and recycling supply) determines how much new gold reaches the market. Project pipelines, grades, permitting timelines, rising input costs and geopolitics in producing regions all influence supply. Tight supply can support prices, whereas expansions and high-cost production can have the opposite effect over time.

Central bank reserves

Central banks hold gold as part of their foreign-exchange reserves, and coordinated or persistent buying/selling can shape medium-term price trends. Accumulation phases can be attributed to diversification out of other reserve assets and a desire for a non-defaultable store of value.

The US dollar

Gold is priced globally in USD. All else being equal, a stronger US dollar corresponds with lower precious-metal prices (and vice versa). Australian investors should consider their risk appetite and also look at movements in AUD/USD, which affect local-currency returns even if USD gold prices are unchanged.

Silver versus gold for Australian investors

The gold/silver ratio (GSR) indicates how many ounces of silver equal the price of one ounce of gold. A rising GSR generally implies silver is getting cheaper relative to gold, while a falling GSR implies silver is outperforming. Some investors watch the GSR when deciding whether to tilt more towards gold (defensive/monetary characteristics) or invest in silver (more cyclical/industrial).

Investors tend to lean towards gold when they are in the market for defensive characteristics or as a potential ballast during risk-off periods. Those seeking out more cyclical or industrial leverage might prefer silver. Many Australian investors hold a blend of the two, adjusting their allocations as their views on growth and inflation change.

How to get started

1. Choose your investment type: Decide whether physical gold, ETFs or gold-related shares best suit your objectives and risk tolerance. If you’re still deciding how to invest in gold in Australia, think about how each method works in terms of your time horizon and portfolio role (diversifier, potential inflation hedge, growth exposure, etc.).

2. Pick a platform or dealer: For ETFs and shares, open a CMC Invest stockbroking account, compare markets and research tools, then place your orders during market hours. For bullion, look at reputable Australian dealers (and the Perth Mint) for pricing and more.

3. Make your first purchase: For ETFs or shares, get the ticker code, read the PDS and company announcements, make sure you’re happy with the fees, and then place an order consistent with your plan (order type, quantity, execution price). For physical bullion, pick your preferred bar/coin type and weight, review the premiums and any buy-back policies, and make sure you keep good purchase records for tax purposes.

4. Storage considerations: Physical gold demands secure storage (home safes or insured vaulting) and might also need to be insured. ETFs don’t require any personal storage, but they will incur management fees. Shares, on the other hand, come with company-specific risks and need to be actively monitored.

Is gold a safe investment?

The safety of investing in gold depends on a range of factors, including an individual’s risk tolerance, investment goals, and time horizon. Gold prices can be influenced by global economic conditions, central bank policies, and market sentiment, meaning its value may fluctuate over time.

Key risks to consider

• Price volatility: Gold can swing on interest-rate expectations, the US dollar, global risk sentiment and more.

• Vehicle-specific risks:

  • Bullion: Storage, insurance, authenticity.

  • ETFs: Management fees, tracking differences versus spot price.

  • Shares: Company-level and financing risks. More volatile than the metal.

• Liquidity and spreads: Physical premiums and discounts can widen in stressed markets. ETFs and shares are subject to market-hour liquidity.

• Concentration: Over-allocating to one asset class can raise your portfolio risk.

Risk management strategies

• Investors may wish to ensure that investment sizes align with their individual risk tolerance.

• Diversification across different investment methods (for example, ETFs and shares) and asset classes can help reduce exposure to any single risk.

• It’s important to review key documents such as the Product Disclosure Statement (PDS) and company reports, and to understand how each product works before investing.

• Portfolios should be reviewed periodically to assess whether they continue to meet an investor’s objectives and risk profile.

Gold is a widely recognised asset with defensive characteristics, a long history of use, and a presence in many diversified portfolios. Whether considering physical bullion, gold ETFs, or gold-related shares, each option has its own features, costs, and risks. If you’re exploring how to invest in gold in Australia, use a structured process and a trusted platform. Then revisit your allocation over time with strict discipline.

Start investing in gold today by opening an account.

This article provides general information only. It has been prepared without taking account of your objectives, financial situation or needs. It is not to be construed as a solicitation or an offer to buy or sell any financial instruments, or as a recommendation and/or investment advice. It does not intend to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any financial instruments. You should consider your objectives, financial situation and needs before acting on the information in this article. CMC Markets believes that the information in this article is correct, and any opinions and conclusions are reasonably held or made on information available at the time of its compilation, but no representation or warranty is made as to the accuracy, reliability or completeness of any statements made in this article. CMC Markets is under no obligation to, and does not, update or keep current the information contained in this article. Neither CMC Markets nor any of its affiliates or subsidiaries accepts liability for loss or damage arising out of the use of all or any part of this article. Any opinions or conclusions set forth in this article are subject to change without notice and may differ or be contrary to the opinions or conclusions expressed by any other members of CMC Markets.