We’ve been receiving more enquiries about gold lately — how to own it, whether it’s still worth buying, and how it compares with shares. With gold at all-time highs, it’s worth looking at the options, performance, and key considerations.
Ways to Invest in Gold
Gold is usually bought as a defensive holding to help balance a portfolio, or by investors concerned about currency swings and inflation. There are three main pathways for investment:
| Method | What it Involves | Pros | Cons |
|---|---|---|---|
|
Physical gold (bars, coins, bullion) |
You buy and (need to) store/insure the gold yourself or through a depository. |
Very direct ownership; tangible asset; no counterparty risk. Good hedge in crisis. |
High storage costs, lower liquidity, premiums, and authenticity risks. |
|
ETFs / Exchange-traded products / fund |
You buy shares in a fund whose value tracks gold (or gold + hedging etc.). Doesn’t require you to handle the metal. |
Simple to trade, low cost, scalable, tax-efficient, and highly liquid. |
Fees, potential tracking error, currency/hedging risk, and limits on physical conversion. |
|
Exposure via gold miners / royalty/ streaming companies |
Buying shares in companies that produce gold, or funds of such companies. |
Leverage to gold prices, possible operational gains, and dividend income. |
Exposure to operational, cost, and geopolitical risks; more volatile, less tied to gold prices, and may lag in rallies. |
ETFs: GOLD, QAU, NUGG — What’s the Difference?
To illustrate some of the trade-offs, here’s how four popular ASX-listed gold ETFs compare:
| ETF | What it Offers | Points of Difference |
|---|---|---|
|
GOLD (Global X Physical Gold ETF) |
Direct exposure to physical gold; tracks spot price of gold in AUD. |
Among the largest; good liquidity; you get exposure to AUD gold price so you still carry currency exposure via gold pricing in USD (see below.) Moderate fees. |
|
QAU (BetaShares Gold Bullion ETF, Currency Hedged) |
Physical gold, but hedged for currency (AUD/USD). |
Hedging reduces AUD/USD risk: if the AUD strengthens, you are less exposed. But hedging has cost and can reduce upside when AUD weakens. Slightly higher fees compared to non-hedged options. |
|
NUGG (VanEck\ Gold Bullion ETF) |
Physical gold, stored in Perth Mint (Australian origin), backed by allocated bullion. |
Provides an option to convert holdings to physical gold; smaller size but growing. Fees are competitive. |
|
PMGOLD (Perth Mint Gold ETF) |
Provides exposure to gold (via rights rather than allocated metal for each unit), tracks AUD gold price. |
Lower fees; sometimes favourable for smaller investors who don’t need physical allocation per se. Has the possibility for conversion via Perth Mint. |
If the AUD is expected to weaken, unhedged ETFs like GOLD may deliver more upside. If the AUD is rising, QAU reduces that risk. NUGG provides more of a “local” flavour with Perth Mint backing.
Why Gold is Rising - FOMO & USD Impacts
Several dynamics are pushing gold higher:
Weakness / drop in US dollar this year has boosted gold’s appeal. Because gold is priced in USD globally, when the dollar weakens, gold becomes cheaper in other currencies → demand rises. Also inflation expectations, interest rate expectations (lower real rates) fuel demand.
Record high gold prices: Gold has reached all-time highs (measured in USD per ounce) in 2025.
Currency considerations matter a lot for Australian investors: you buy gold effectively in USD (or gold globally is priced so), then convert to AUD; if AUD weakens, your AUD return is boosted (and vice versa).
Performance: Gold vs ASX 200 vs S&P 500
| Asset | Approx Return Year-to-Date (to end-August 2025) |
|---|---|
|
Gold (USD) |
Circa +26–28% YTD. |
|
Gold (AUD) |
Gold has risen circa 38% YTD. |
|
Gold (ETF) |
Up 33.1% YTD (22/9). |
|
ASX 200 |
Up 7.8% YTD (22/9). |
|
S&P 500 |
Up 13.3% YTD (22/9). |
Pros / Cons: Why ETFs Often Beat Physical for Most Investors
- Ease & convenience: Buying ETFs is simple via brokerage, no worries about transporting, storing, insuring, proving authenticity.
- Cost effectiveness: Even though there are fees, storage/shipping/insurance costs for physical often make it expensive, especially for smaller holdings.
- Liquidity: ETFs are traded on exchanges; more buyers/sellers, tighter spreads. Physical gold might be harder to sell quickly at a fair price.
- Flexibility: Some ETFs let you take advantage of currency hedging, or convert to physical (if desired), giving hybrid options.
On the flip side, if there’s a systemic crisis or currency collapse, having physical possession may provide psychological or practical benefits. Also some people prefer the “realness” of owning metal.
What to Watch For
Movements in US interest rates / real rates (interest minus inflation). Lower real rates tend to help gold.
Direction of the USD / AUD exchange rate. If AUD strengthens a lot, that eats into returns for Aussie gold investors.
Inflation pressures, another round of geopolitical or financial stress (e.g. banking, currency, safe-haven demand) often spark gold demand.
Cost curves for mining, supply constraints, and ETF demand.
| RISK | WHAT TO WATCH | |
|---|---|---|
|
Geopolitics |
Ukraine, Middle East, Taiwan tensions |
Trade Wars |
RISK
WHAT TO WATCH
Geopolitics
| RISKS | WHAT TO WATCH |
|---|---|
| Geopolitics | Ukraine, Middle East, Taiwan tensions |
| Trade Wars | US-China tariffs, Mexico sanctions |
| Sticky Inflation | Especially in energy and services |
| Growth Concerns | Weakening consumer demand |
| US Debt | $1.9T deficit + $1T in interest payments |
| Climate Risk | Infrastructure damage and supply chain disruption |
| Valuation Risk | Over concentration in megacap tech |
Conclusion
For most investors asking about gold, ETFs are often the more practical route. They offer much of the benefit without the headaches of storage, insurance, physical security, etc. If you pick your ETF carefully (consider fees, whether it’s physical, whether currency-hedged), you can get very close to the upside of gold.
Gold is rallying hard, and fear of missing out is not entirely unjustified. But like any asset, there are risks (currency swings, interest rate moves, mining / political risk if going the miner route). For many portfolios, a modest allocation in gold or gold-ETFs as a hedge makes sense rather than going “all-in.”
Tony Raikes
CPA. B.Acc Dip.FP Grad.Cert.Mgt
Private Client Advisor
Authorised Representative No. 00448193
Prince Wealth Founder and Financial Adviser Tony Raikes utilises a variety of advanced risk management strategies to protect clients’ portfolios and is dedicated to providing a comprehensive financial planning experience, empowering clients to make confident and informed decisions about their financial future.
