Gold, for investment purposes, is usually held in the form of bullion coins or in a gold bullion exchange-traded fund (ETF). Gold company stocks can be held individually, or in a gold stocks mutual fund or ETF.
Examples of popular bullion coins minted by the United States, Canada, and South Africa are illustrated below.
Exchange traded funds
- SPDR Gold Shares (GLD) (Company shares)
- iShares Comex Gold Trust (IAU) (Bullion)
- Central GoldTrust (GTU) (Closed-end fund)
Gold stocks and mutual funds
- See Precious metals equity page which has different characteristics than gold bullion.
Gold Bullion and gold bullion ETFs are subject to the maximum 28% capital gains tax on collectibles. This tax rate is higher than the maximum capital gains tax of 15% on other investment assets. However, in some cases, such as with GTU, gains can be taxed as capital gains because the investment can be treated as a passive foreign investment company (PFIC) - see a tax adviser for details.
Before 1968, the price of gold was relatively stable, with few major fluctuations. From 1968-1978 fundamental changes were made to the global monetary system and gold's treatment in the United States, potentially changing gold's role as an asset class.
In 1968, the "gold pool" system, where central banks traded on the private market to control the price of gold, was ended, resulting in the price of gold diverging from the official price. The United States stopped allowing the convertibility of the dollar to gold in 1971 and officially ended it in 1973.
Gold was re-legalized for Americans to own and trade in 1975. In 1978, the official price of gold was finally removed. During and after these changes, the real price of gold has been highly volatile.
The long term real return of gold and other assets over the 1900 to 2011 is included in the following table.
|Asset||Geo mean||Arithmetic mean||Std dev.||Sensitivity to inflation|
(View Google Spreadsheet in browser, then File --> Download as to download the file.)
The following table provides annual gold prices (including high and low prices) starting in 1970.
- The United States Mint American Eagle Bullion Coins
- The Royal Canadian Mint Maple Leaf Bullion Coins
- The South Africa Mint Kruggerrand Bullion Coins
- Bogleheads® forum post: , pepys. Dec 08, 2019
- Credit Suisse Yearbook 2012, Retrieved 10 December 2012.
- The Price of Gold, 1257 - Present., MeasuringWorth, viewed December 24, 2019.
- Rediscovering Gold As An Asset Class Juan Carlos Artigas, Journal of Indexing, November/December 2010.