Alternative Options for Investing in Gold

Investing for retirement has gotten more and more concerning for millions of Americans. Interest rates, which many people use for investing in real estate, are not expected to fall below 6% this year. With up to 70% of all rental properties owned by individual investors, this could severely hurt people’s retirement options.

It’s fair, then, to look at alternatives. Gold has become increasingly popular among people not wanting to rely on Social Security or traditional IRAs or 401(k) plans. The most reliable data show that only around 3% of all IRAs deal in alternatives like gold. With that in mind, we’ll take a look at the reasons some people aren’t going the route of Gold IRAs, and what other options are out there for investing in the world’s most reliable metal.

Main Points

  • Gold IRAs are a popular option for good reasons, but there are also drawbacks: liquidity, possession, and buy-back rates.
  • Other options include: physical gold; exchange traded funds (EFTs); futures; and stocks in gold companies.
  • Each option has risks and benefits, and each should be weighed against what a person wants out of their investment.
  • An investor can diversify within the Gold market, devoting a portion of their savings to any combination of options.

Why Some People Don’t Use Gold IRAs

A gold IRA has a lot of benefits. Gold is historically a hedge against inflation–which is currently at at 40 year high–and is generally regarded as safe and discrete. Anyone looking for the best reasons to go with a Gold or Silver IRA need look no further than our own detailed guide.

But the reasons for staying away from a precious metals IRA may be just as compelling to people as the selling points are. For one, if your Gold is in an IRA, you can’t actually touch it. Another reason people may not go for a Gold IRA is that it is a relatively inflexible option. If a person is an active trader, looking to move money and investments in real time, then a Gold IRA isn’t the best option.

Lastly, many people don’t want to go with a precious metals IRA because of the rules. IRAs of all types have regulations about when and how much a person can withdraw. There are tax benefits, to be sure, but some people don’t want to be told what to do with their own money–which leads us to the other Gold options.

1. Exchange Traded Funds (EFTs)

One of the most buzz-worthy options for investing in gold is EFTs. They are a flexible, high-speed way to invest in physical gold, without needing to possess the metal itself, and without needing to deal with IRA restrictions about deposits and withdrawals. EFTs are investments in trusts that themselves hold physical gold. One EFT, the SPDR Trust, owns over 31 Millions ounces of gold, as of October, 2022. 

That’s a lot of gold, and more than any one individual investor could ever expect to own. By investing with an EFT such as this, you basically own stock in a company, like any other, except that this company only deals in gold trading.


  • Easy to invest in large sums of gold
  • Relatively low-cost barrier to entry


  • Little to no control over the management of the fund
  • Relatively few EFTs on the market to choose from

How You can Make/Lose Money with an EFT

It’s relatively straightforward with an EFT. If you invest in a high-performing fund, you’ll make as much money as you own shares in the trust. Unfortunately, it’s just as easy to lose money with an EFT, because you have relatively no say in how the fund is managed. The trust protects itself, first. That means they can liquidate or dissolve the fund with no input from you, and that means you could lose substantially.

How to Invest in an EFT

If you already have a broker, you can simply ask them to explore Gold EFT options. They present you with data on what EFTs they have relationships with, and you can invest in them like you could invest in the stocks of any other company. If you don’t want to go through a broker, you can contact an EFT directly, and they can guide you to brokers as necessary.

2. Gold Futures

Gold Futures, like futures in any commodity, are a tricky and high-risk, high-reward proposition. Fortunes can be made trading in futures–and a person’s entire life savings can be wiped out in a day. Trading in futures typically requires deep knowledge of not only the commodity and every industry related to it, but also a good feel for the entire commodities market.

Futures work a little bit like gambling. Even more so than most investing. The basic mechanism works like this: one party agrees to sell a commodity (gold) at a certain date, at a certain price; the other party agrees to buy the commodity at that date at that price. The buyer is legally required to take physical possession of the gold on that date, and the seller is legally required to deliver it.

If this sounds risky, that’s because it is. There are a lot of ways both sides can be exposed. For instance, if a person were to speculate in the gold futures market, and buy a contract to purchase 100 ounces of gold on March 1st for $1,200 an ounce, you will be required to take that 100 ounces and be held accountable for all $120,000 on the note.


  • Potential for extremely high return
  • Allows same-day results


  • Potential for losing large sums of money
  • Requires constant attention to and knowledge of the gold market
  • Tax implications can be complicated

How You can Make/Lose Money with Futures

Most entities involved in the futures markets are firms or industry insiders. Coffee roasters will protect themselves against a price increase by locking in futures at today’s prices. A coffee bean farming concern may sell those futures to make sure that they will be able to sell their future crops. Both of these companies are dealing in futures because they need the physical product to be traded.

In our case, as investors, we could lose or make money based on how those same industry insiders react to their own market. It’s speculation, pure and simple. You can make or lose money based on what the market and its actors behave regarding the–ahem–future of their product.

How to Invest in Futures

Like EFTs, it’s a simple process. Simply contact a broker who deals in commodities or the gold market in general, and set up an account. They’ll explain the ins and outs of their particular model, and you can begin investing right away.

3. Buying Stocks in Gold Companies

Both of the options we’ve discussed above deal with investing in gold, but not owning it. And in both cases the returns you may see on your investments are contingent on how the gold market performs. But what factors affect that market? In a word: industry. Gold prices are affected by people investing in it, for sure. But the Law of Supply and Demand goes further than people buying and selling gold so they have something pretty to look at. 

Gold is used in jewelry, dental work, and nearly every kind of electronic device. That means there are literally hundreds of companies you could invest in dealing with the gold market. A person can invest in gold brokerages, gold miners, gold transport companies, even gold insurance underwriters. 

The possibilities are only limited by the imagination of the investor. And in all these cases, the stocks are playing the EFT and futures markets, as well, albeit indirectly. If you invest in a gold mining company, odds are that same company is already in the futures market. If you invest in a brokerage, they definitely have a hand in the EFT market, even if only as agents.


  • A safe and familiar way to invest in the gold market
  • More options for investing, including using your existing broker or manager


  • Opens the investor to exposure should the gold company face any problems like litigation, tariffs, or labor issues
  • Does not allow for as much reward directly related to the gold market

How You can Make/Lose Money in Gold Stocks

Like any other stock market or index, you’re not only investing in a type of company, but in the people behind the company as well. If you are invested in a gold mining company with a questionable human rights record, you may see short-term gains as they are able to maximize profits–and then you could see crushing losses as that company may face international sanctions. Remember that investing in companies in the gold world means investing in their industry, their leaders, and their practices.

How to Invest in Gold Stocks

Contact your principal investing broker. If you’re a savvy day trader, you are already there–just research, make your calculations, and press the button. One last note, this is also an option if you want to keep your existing IRA or 401(k), but your manager allows you to have input in how the money is invested. Contact your fund manager to find out if investing in gold-related companies is an option for you.

4. Physical Gold

I’ve written extensively on the benefits and risks of investing in Gold, and no topic in this area is more controversial than owning physical gold. The glitter of man’s oldest money is hard to ignore, and for some, impossible to resist. But there are a number of potential dangers, not the least of which is having to provide for the security of your investment.

I’ve detailed the pros and cons of Physical Gold versus a Gold IRA, but if you don’t have time for the full breakdown, I’ll leave the pros and cons of Physical ownership pretty simple. With physical gold, you own it–you can spend it, sell it, or keep it. But it also doesn’t make money like other investments do. You’re totally at the mercy of the market, and finding a buyer when you’re ready to sell.


  • No one can tell you what to do with your gold
  • In emergencies, it provides you with hard currency


  • Gold in and of itself doesn’t earn money, as dividends from EFTs, stocks, or futures do
  • You are responsible for all security, transportation, and sale of your gold

How You can Make/Lose Money with Physical Gold

If you decide to invest in physical gold, the odds are that you’re doing it for security in case of emergency. If you’re trying to earn a profit, you have to first have enough cash to buy a lot of gold, then wait for the price to go up, then find a seller. You can lose money through theft, transportation and security costs, and in fees that may be required to sell your gold.

How to Invest in Physical Gold

Of course I would start with the best Precious Metals Companies, a list I’ve worked hard on over the years. Next, you need to work through how much you can safely invest–remember, a physical gold investment won’t have monthly or yearly dividends, so you’ll need to determine how much you can invest without needing any return in the near future. Then, contact a company that matches your values, and get all the info you can.


After reading this article, you may well have decided that you do want a Gold IRA, after all. As I’ve written in multiple articles, there are millions of Americans who want the tax benefits and security of an IRA, and Gold IRAs are a great option. But if you want to move away from IRAs completely, or if you want to diversify your portfolio even more, we’ve covered some of the very best options here.

And remember–investing in one option or another doesn’t mean you can’t also invest in the rest. If you want to explore the exciting world of futures, find a broker and decide on a low-cost option. Doing so doesn’t mean you can’t also invest in EFTs or physical gold.

Just always remember to keep your safety and security most in mind. Invest only what you can afford, and keep your long-term goals in mind over short-term gains. All the glitters is not gold.

About the author Greg Lorenzo

Greg is a financial expert who has been advising his audience on loans for over 10 years. He has a wealth of knowledge and experience in the area, and he is passionate about helping people get the best possible deal on their loans. Greg is an expert in negotiating loans, and he has a proven track record of getting his clients the best possible terms. He is also a strong advocate for financial literacy, and he regularly gives workshops and seminars on the topic.

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