Gold can be a very attractive investment, especially for novice investors. It provides stability and a way to diversify your investments. However, like any investment, there are always risks involved. To invest safely in gold, you need to start small and understand that cost is more important than market timing.
This beginner’s guide will help you get started investing in gold without overdoing it.
Can I invest in gold with a small amount of money?
According to the World Gold Council, gold prices surpassed $5,000 per ounce in early 2026, but you don’t have to spend that much money to start investing in the precious metal. You can buy small amounts of physical gold or invest in stages through gold ETFs and mutual funds.
However, purchasing gold may have minimum investment requirements. While it may not cost per ounce, investing in gold can require more upfront investment than your average penny stock.
This isn’t necessarily a bad thing. The stability of gold can provide greater security to your investment than “cheap” investments. If you are interested in investing in precious metals, but feel that gold is too expensive, you may also consider investing in silver.
How much gold is enough to start?
There is no universal minimum or ideal amount to purchase gold. Every investor has different goals and risk tolerance. Long-term investors may purchase smaller amounts of gold and expect greater returns over many years. Those looking for short-term gains may buy larger amounts to maximize profits one or two years from now.
No matter your goals, always start small and consider gold as part of a broader investment strategy. Think of gold as a useful asset diversification tool, rather than a single investment vehicle.
Different ways to invest in gold
There are many ways to invest in gold, including purchasing physical gold and investing in gold without the need for physical storage. You can do both on a budget.
physical gold options
The easiest way to buy physical gold coins and bars on a budget is to buy smaller denominations, such as 1 gram or 1/10 oz bars, bullion coins valued for their precious metal content, or historic collectible coins. You can save money by purchasing less pure products and by purchasing gold from private mints rather than government-minted products that serve as legal tender. Gold dealers such as American Hartford Gold and Thor Metals offer both types of products.
One of the most effective ways to manage your physical gold purchases is with a Gold IRA. Through this arrangement, the custodian manages purchasing, transportation, physical storage, and tax compliance requirements. You are still the one directing the purchasing decision. A custodian acts as an intermediary between you and a reputable dealer.
Set up a new account or roll Convert the cash value of your retirement savings into gold. Gold IRAs have pros and cons, so be sure to understand how they work before setting one up.
Gold investment without physical storage
Storage costs and dealer fees can quickly add up to an investment in physical gold. Low-cost gold investments do not require physical storage. These options include:
- Gold ETFs and mutual funds: Gold ETFs and mutual funds buy pools of assets in exchange-traded funds. These funds track spot prices and invest in mining stocks, making them a good way to invest in the gold industry as a whole.
- Gold stocks: Investing in publicly traded individual gold producers, miners and royalty companies is riskier, but can offer higher returns.
- Gold Savings Account: These savings accounts tie your deposit to the price of gold, so you get value based on the spot price.
- Mining funds: Mining funds invest a certain percentage of their total assets in shares of precious metal mining companies. Similar to ETFs and mutual funds, they spread your risk across a variety of stocks, bonds, and products that can potentially exceed gold.
Each of these options comes with different cost structures and risks. These funds and stocks can be quickly converted into cash, so they are usually cost-effective for beginners. Transaction costs are also typically lower and may be limited to brokerage fees for certain trades or annual expense rates charged by mutual funds.
Investing in gold stocks is often more attractive to beginners because they have fewer fees and complications. If you already have a brokerage account, it may be as easy as searching for and buying stocks and ETFs.
Gold IRAs and cost considerations for beginners
Gold IRAs can be an attractive option for retirement savers because the price of gold is relatively stable. However, they are significantly more complex than traditional IRAs and may require more active monitoring.
Gold IRAs typically require higher upfront costs due to the cost of moving and storing the gold. (Not to mention the higher price per ounce compared to traditional securities.) There are setup fees, custodian fees, and transaction fees on every purchase.
If you’re just starting to save for retirement, high initial setup costs probably don’t make sense to you. However, if your portfolio is in good shape, a Gold IRA rollover can be a good way to diversify your asset holdings and gain additional protection against market volatility.
Why beginners often spend too much gold
When just starting out, several pitfalls can cause investors to overspend their gold. These may include:
- Not understanding markup, storage, and fees: Purchasing gold is not as simple as entering a transaction on an intermediary website. “New investors tend to overspend on gold due to the premium over gold’s spot price and gaps in knowledge about the costs associated with investing,” said Peter Regan, financial markets strategist at Birch Gold Group, a precious metals IRA firm. While the spot price is the price per ounce of gold, the total cost of purchase includes dealer markups, storage costs, and transaction fees.
- Overpaying for “premium” products: Beginners may purchase collectible coins. This is typically a rare historical coin that can be more expensive than bullion coins, but it cannot be held in a gold IRA. When a product is effectively marketed, its true value can easily be misunderstood. While collectible coins may have some sentimental value, the actual gold content may not be worth the price paid.
- Emotional or fear-based purchases: Regan said novice investors “tend to overbuy at unfavorable prices because of their emotional attachment to gold as an investment option.”
How to avoid overspending and common money scams
Like any investment, investing in gold involves risks. Several precautions should be taken to reduce the risk of overspending and avoid fraud.
- Compare prices between sellers. Dealers add a markup to the price of gold. Always compare prices and fees to find the best deal.
- Request full disclosure of fees: Before you buy, ask for an itemized receipt so you know exactly what you’re paying for.
- Avoid urgent or guaranteed claims. Reputable dealers want to win your business through service and pricing. Be wary of marketing tactics that promise value or insist you buy early.
- Validate credentials individually. If you’re unsure of a dealer’s legitimacy, check the American Numismatic Association’s (ANA) dealer directory for credentials and search the Better Business Bureau (BBB) for complaints.
conclusion
Despite the high price per ounce, investing in gold does not require a large initial investment. You can acquire physical gold or invest in low-cost gold securities without spending a lot of money. Before you start, understand your costs and develop a diversification strategy to avoid over-committing to a single asset. Over time, you can continue to buy more gold and gradually increase your gold holdings.
Frequently asked questions about gold investment
What is the cheapest way to start investing in gold?
Generally, the lowest cost way to invest in gold is through gold ETFs or gold mining stocks. You can often purchase fractional shares for less than $50.
Is it better to buy physical gold or gold ETFs within your budget?
If you’re on a tight budget, it’s much more cost-effective to buy a gold ETF than physical gold. Physical gold requires storage costs and additional transaction fees, which makes it more expensive to purchase.
Can I invest in gold for less than $100?
Yes, with a digital gold savings account, you may be able to invest grams of gold for as little as $1. Fractional purchases of ETFs, individual stocks, and physical gold can also be worth less than $100.
