As the price of gold gleams brighter than it has in recent memory, many individuals are increasingly drawn to the idea of owning physical gold. Yet, for those new to this world, the questions are many: How exactly does one buy gold? What types of gold products are available? And most importantly, which form of gold is best suited for investment versus collecting or adornment? Clémentine Cazalets, an economist at the Monnaie de Paris, sheds light on these questions and offers practical guidance to help investors and enthusiasts alike approach physical gold with confidence and clarity.
Why Gold Is Shining Once Again
Gold’s allure is nothing new. Throughout history, it has been regarded as a symbol of wealth, security, and even beauty. But in recent years, gold’s role as a financial refuge has been reignited by a complex web of global uncertainties. From the sudden upheaval caused by the Covid-19 pandemic to persistent geopolitical tensions and fluctuating trade policies, the world has faced a series of shocks that have unsettled markets and shaken investor confidence.
This volatility has led many to rediscover gold’s time-tested reputation as the ultimate “safe haven” asset. Over the last five years, the price of gold has doubled, reflecting this growing demand and reinforcing its status as a reliable store of value in times of crisis.
What’s noteworthy is that this renewed enthusiasm extends well beyond central banks and institutional investors. Ordinary people, from retirees safeguarding their savings to younger generations seeking stability amid economic uncertainty, have also turned to gold. Some are selling existing holdings to capitalize on peak prices, while others are buying, motivated by a desire to protect their wealth against inflation and market fluctuations.
Real-World Signs of Rising Gold Demand
This trend is visible in various markets worldwide. Take the United States, for example: In June 2023, the wholesale giant Costco began selling small gold bars—known as “gold bullion”—directly in its stores. The response was immediate and intense. So much so that the company recently introduced a limit of one ounce (approximately 31 grams) of gold per customer per transaction to ensure enough supply for all interested buyers.
Across the Atlantic, Europe has seen its own fluctuating relationship with gold. In the early 2020s, many Europeans eagerly purchased physical gold as prices climbed. Some later chose to sell and lock in profits at historically high prices. However, since mid-2024, demand has surged again, defying the expectation that high prices might deter buyers. In fact, during the first quarter of 2024 alone, net gold purchases in Europe—meaning the volume of gold bought minus the amount sold—exceeded 26 metric tons.
Decoding the Different Types of Physical Gold
If you’re considering purchasing physical gold, understanding the distinct categories is essential. Physical gold is broadly divided into three types: investment gold, collectible coins, and jewelry. Each serves different purposes, appeals to different buyer motivations, and comes with unique pricing structures and market dynamics.
Investment Gold: The Purist’s Choice
Investment gold forms the backbone of the physical gold market. Typically available as coins or bars, this gold is characterized by its purity, often 99.99%, and its status as a straightforward store of value.
The most common investment unit is the one-ounce gold coin—a standard measure in the precious metals industry. These coins are often minted by official institutions, granting them legal tender status and a face value. However, this nominal value is largely symbolic, as the true worth of these coins is determined by their gold content.
Prices for investment gold closely mirror the current market price of gold, plus a modest premium. This premium accounts for production costs, transportation, and the seller’s margin. Because their value tracks the gold market so closely, these coins are widely regarded as the gold standard for those seeking direct exposure to the precious metal’s price movements.
For investors looking for simplicity, liquidity, and transparency, investment gold offers a reliable and tangible option.
Collectible Coins: Where History Meets Value
For those interested in both history and investment, collectible gold coins offer a fascinating alternative. Like investment coins, these are made from pure gold and issued by official mints. However, their value goes far beyond the gold they contain.
The market for collectible coins, often called numismatics, considers factors such as rarity, condition, year of minting, and artistic design. These elements can significantly increase a coin’s price, sometimes far above its bullion value.
Collectible coins are popular among passionate collectors who appreciate the cultural and historical significance of their pieces. But they also attract investors who hope to profit from their scarcity and demand over time, independent of gold’s price fluctuations.
That said, the collectible coin market can be more complex and less liquid than investment gold, requiring specialized knowledge to navigate effectively.
Jewelry: A Blend of Culture and Wealth
Physical gold also exists in the form of jewelry, but its role as an investment varies greatly depending on cultural context.
In Western countries like France, jewelry is mainly purchased for its aesthetic or sentimental value rather than as a direct investment. Yet, in many Asian countries, gold jewelry serves a dual purpose: cultural adornment and a tangible store of wealth.
Limited access to formal financial markets and savings vehicles in these regions often leads people to invest in gold jewelry as a practical way to safeguard wealth across generations. This practice is so widespread that gold prices often rise seasonally, aligned with major cultural and religious festivities.
For example, between November and February, which coincides with festivals such as Diwali in India and the Lunar New Year in China, gold demand surges. Similarly, prices often climb in August ahead of China’s National Day celebrations.
In Western markets, while buying gold jewelry purely as an investment is rare, selling old or inherited pieces to capitalize on rising gold prices is common. However, sellers should be aware that gold used in jewelry is typically alloyed with other metals like silver or copper to enhance durability, meaning its purity is lower than that of investment gold. This alloying reduces the resale value relative to pure gold.
Making Smart Choices in a Complex Market
Given the variety of physical gold options available, it’s crucial to clarify your goals before purchasing. Are you seeking to hedge against economic uncertainty? Build a unique collection? Or perhaps acquire a tangible asset with lasting value? Understanding the differences between investment gold, collectible coins, and jewelry can help you make informed decisions tailored to your needs.
Each category has its own risk profile, market behavior, and liquidity considerations. Investment gold offers price transparency and ease of resale, collectible coins add a layer of historical and artistic value but require expertise, and jewelry blends cultural significance with financial worth but often at a lower gold purity.
Beyond Physical Gold: Diversifying Your Portfolio
For investors looking to broaden their exposure to gold without handling physical metal, financial products such as gold-backed exchange-traded funds (ETFs) provide a convenient alternative. ETFs allow investors to buy shares that track gold prices, combining the liquidity of the stock market with the stability of gold.
Financial newsletters like Trackers by Capital, in partnership with FranceBourse, offer timely advice on how and when to invest in gold ETFs alongside other asset classes like stocks and bonds.
The Everlasting Glow of Gold
Gold has a timeless appeal that transcends economics. It is a symbol of stability, beauty, and human aspiration. Today, as the world grapples with rapid changes and uncertainty, gold’s role as both a cultural emblem and a financial safeguard has never been more pronounced.
By educating yourself about the distinct forms of physical gold and their unique advantages, you can navigate this fascinating market with greater confidence and make choices aligned with your financial goals and values.
Whether you’re a seasoned investor or a curious newcomer, gold’s radiant allure offers something for everyone—a tangible piece of security and history in an unpredictable world.