Physical Gold — Buy, Store, Sell
Buy Physical Gold vs Gold ETF vs Allocated Storage
By Michael Tanguma, Founder & CEO of Heirfolio. Reviewed by Diana Cruz, GIA Graduate Gemologist. Updated May 25, 2026.
TL;DR. A gold ETF is a paper claim on gold a fund holds. Allocated storage is a specific bar with your name on it in a regulated vault. Physical gold in your home is the metal in your hand. All three reference the same spot price; only one of them is actually gold you can deliver. Over 10 years, the cost spread is roughly 0.40% per year (ETFs) to 1.20% per year (allocated storage) to 0–0.5% per year (home, plus theft and insurance risk). The right one depends on what you're solving for.
A reader bought $50,000 in GLD shares in 2022. In 2024, when she tried to take delivery of the underlying gold, she discovered what most ETF investors don't read in the prospectus: she couldn't. GLD shares are convertible to physical gold only by Authorized Participants, in minimum baskets of 100,000 shares (roughly $30 million as of 2026). For retail holders, GLD is a price-tracker — it is not a claim on gold you can hold.
This isn't a scandal. It's in the prospectus. But it's also the single most-misunderstood feature of gold ETFs, and it's why this comparison matters.
The failure mode to name first: gold ETFs, allocated storage, and physical gold are not substitutes for each other. They reference the same spot price. They behave the same way on a chart. They are not the same asset. Choose the one that matches what you actually want.
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What is each one, exactly?
| Asset | What you own | Where it lives | When you can convert to physical |
|---|---|---|---|
| Gold ETF (GLD, IAU, SGOL, GLDM) | Shares in a trust that holds gold | A custodian's vault (typically HSBC, JPMorgan) | Only in 100,000-share baskets, via Authorized Participants. Not retail-accessible. |
| Pooled gold | A pro-rata interest in a pool of bars | Mint or vault, unallocated | Convertible to allocated bars usually at 1 kg+ thresholds |
| Allocated gold (vaulted) | Specific, serial-numbered bars in your name | Regulated vault (Royal Canadian Mint, Brinks, Loomis, Delaware Depository) | Yes — physical delivery available |
| Physical gold at home | The metal in your hand | Your safe, your possession | Already delivered |
| Gold IRA | Tax-advantaged ownership of allocated bars | IRS-approved depository | Yes after age 59½ (or with penalty earlier) |
These five categories cover roughly 99% of how individuals own gold today. They are not equivalent.
The full feature-by-feature comparison
| Feature | Gold ETF | Pooled gold | Allocated vault | Physical at home | Gold IRA |
|---|---|---|---|---|---|
| Tracks spot price | Yes | Yes | Yes | Yes (in concept) | Yes |
| Counterparty risk | Yes — trust + custodian | Yes — mint solvency | Low — bars are titled to you | None | Low — custodian regulated |
| Physical delivery available | No (retail) | At thresholds (1 kg+) | Yes | N/A — already physical | Yes (post-distribution) |
| Acquisition cost (% over spot) | 0.10–0.40% (NAV premium) | 1–3% | 2–5% | 3–7% (retail dealer markup) | 4–8% (IRA setup + premium) |
| Annual cost | 0.10–0.40% expense ratio | 0.50–1.00% storage | 0.50–1.20% storage + insurance | $0 (cash safe) or 0.3–0.8% (insurance rider) | 0.50–1.50% storage + annual IRA fee |
| Liquidity | Highest — sell in seconds during market hours | High — 1–3 day settlement | High — 1–5 day settlement | Moderate — depends on dealer | Lowest — distribution required |
| Spread to sell | Bid/ask roughly $0.01 | 0.5–2% | 1–3% | 5–15% (retail dealer) | 1–3% (within IRA) |
| Tax treatment | 28% collectibles rate on long-term gains | 28% collectibles rate | 28% collectibles rate | 28% collectibles rate | Tax-deferred (Traditional) or tax-free (Roth) until distribution |
| Insurance | Built into expense ratio | Included | Included (Lloyd's typical) | Separate rider (homeowner cap usually $1K–$5K) | Included |
| Confiscation risk | Highest (paper, custodian, jurisdiction) | Moderate (vault, jurisdiction) | Moderate (vault, jurisdiction) | Lowest (in your possession) | High (IRA = registered, traceable) |
| Inheritance friction | Brokerage transfer | Account transfer | Bar re-titling at vault | Physical handoff (no record) | Beneficiary form required; tax consequences |
| Privacy | Lowest (1099-B reported) | Low (1099 if sold) | Moderate (1099 if sold) | Highest (no record of holding) | Low (IRS-reported) |
| Reasonable minimum | $50 (single share) | $100–$1,000 | $1,000–$5,000 | $200 (small coin) | $5,000 (typical IRA setup) |
| Setup time | Minutes | Minutes | 1–3 days | Same day (in person) or 1 week (shipped) | 2–4 weeks |
Where gold ETFs win
Gold ETFs are the easiest, cheapest, and most liquid way to track the gold price.
- Liquidity. GLD trades roughly $1.5 billion in volume per day. You can buy or sell in seconds during market hours. Bid/ask spreads are typically $0.01.
- Cost. Expense ratios range from 0.10% (GLDM, IAU) to 0.40% (GLD). For a $50,000 position, that's $50–$200 per year — the lowest carrying cost of any gold exposure.
- Convenience. You buy them in a brokerage account you already have. Tax reporting is automatic. No storage decision, no insurance decision, no delivery logistics.
- Fractional access. A single share of GLDM is around $50–$80 as of May 2026. You can dollar-cost-average without minimums.
Recommended for: Investors who want price exposure to gold without the operational burden of physical ownership. Tactical positions you might sell within 1–3 years. IRAs and 401(k)s where physical gold is impractical. Anyone whose primary concern is portfolio allocation rather than the actual ownership of the metal.
Not recommended for: Anyone whose thesis is "I want gold so I can have gold." If the reason you're buying gold is the specific, physical, jurisdiction-free property of the metal — then a paper claim on gold held by a custodian in a single jurisdiction is not what you actually wanted.
Where pooled gold wins
Pooled gold is the middle ground. You own a pro-rata interest in a pool of gold bars at a regulated mint or vault. It's not a specific bar, but it's also not a paper claim mediated by an Authorized Participant.
- Lower minimums than allocated. Most pooled programs start at $100–$1,000.
- Conversion path to allocated. At thresholds typically around 1 kg (32.15 troy oz), you can convert your pooled balance into specific, serial-numbered bars.
- Lower premium than allocated. Typically 1–3% over spot at purchase vs 2–5% for allocated.
- Standard storage and insurance included. No separate insurance decision.
Recommended for: Investors who want real gold exposure with low minimums and a path to physical delivery once they hit a meaningful position size. Dollar-cost-averaging into a bullion position over time.
Not recommended for: Anyone who needs the specific-bar property (bars titled in your name) immediately. Allocated is the right starting point if that property matters.
[See our pooled vs allocated gold guide for the detailed comparison.]
Where allocated vault storage wins
Allocated gold is the institutional answer. Specific, serial-numbered bars sit in a regulated vault with your name (or your account) attached. The vault inventory is audited; the bars are insured at full value; the bars can be delivered physically if you ever want them.
- Specific bars are titled to you. Not a claim on gold the custodian holds — your specific bars, with serial numbers you can verify on a custody statement.
- Audited inventory. Major mints (Royal Canadian Mint, US Mint) and major vault operators (Brinks, Loomis, Delaware Depository) publish audit results.
- Lloyd's of London insurance is standard. Coverage at full market value.
- Multiple jurisdictions available. You can hold gold in Canada (RCM), Switzerland (multiple options), Singapore, or the US depending on jurisdictional risk preferences.
- Physical delivery is real. At any time, you can request delivery of your bars to your address or to another vault, paid for in full insured shipping.
Recommended for: Anyone whose gold position is large enough that 0.5–1.2% per year in storage cost is justifiable, who wants the specific-bar property, and who values jurisdiction diversification. Family offices. Multi-generational wealth structures. Anyone preparing physical gold for inheritance — the bars and the custodial relationship pass cleanly.
Not recommended for: Small positions (under roughly $25,000) where the percentage storage cost is high relative to the metal value. Tactical traders who want to flip quickly — settlement is 1–5 days, not seconds.
[See our Royal Canadian Mint vs Brinks vs Loomis comparison for a detailed look at the major vault providers.]
Where physical gold at home wins
Holding the metal yourself, in a safe in your house. The oldest model of ownership. The one with the least counterparty risk and the most operational risk.
- No counterparty risk. Nobody can fail, lose, or freeze your gold. The metal is in your possession.
- Maximum privacy. No 1099 at purchase (most retail bullion sales under $10,000 are not reported), no custodial record. (You still owe tax on any gain when you sell.)
- Immediate access. You can leave the country with it. You can hand it to a family member. You can verify its existence by opening the safe.
- No annual storage fee. Unless you add an insurance rider, the carrying cost is the cost of the safe (typically $800–$3,000 one-time).
Recommended for: Small positions you want as a true emergency reserve. Holders for whom the privacy property is meaningful. Anyone whose threat model is more about counterparty failure than about home burglary.
Not recommended for: Large positions — the theft and insurance math becomes punishing. Most homeowner policies cap precious-metals coverage at $1,000–$5,000 unless you add a specific rider, and even with a rider, claims for stolen gold are notoriously difficult to substantiate. See our true cost of storing gold at home guide for the full cost model.
Where gold IRAs win
A gold IRA is allocated storage inside a tax-advantaged account. Same vault, same audited bars, same insurance — but the tax treatment is the special property.
- Tax-deferred growth (Traditional) or tax-free growth (Roth). The 28% collectibles rate on gains is bypassed inside the IRA wrapper.
- Same physical-delivery property as standard allocated storage, after you take a distribution.
The trade-off:
- Setup is more complex. Self-directed IRA custodian + IRS-approved depository + dealer with reportable transactions. Typically a 2–4 week setup.
- Annual fees are higher. $100–$300 per year custodial fee on top of storage cost.
- Distributions trigger income tax. Withdrawing the metal physically counts as a distribution.
Recommended for: Long-term holders (10+ year horizon) who already use IRAs and want gold exposure inside a tax-advantaged wrapper. The tax savings compound meaningfully over decades.
Not recommended for: Anyone who might need access to the gold in the next 5–10 years. The penalty for early distribution (10% + ordinary income tax) typically wipes out the tax benefit.
The 10-year cost comparison: a $100,000 position
The headline numbers ignore time and compounding. Here is what each costs over 10 years on a $100,000 starting position, assuming the gold price stays flat (a conservative assumption — we'll cover what happens if it appreciates separately).
| Asset | Acquisition cost | 10-year storage / expense | Sell-side spread | Total 10-year cost |
|---|---|---|---|---|
| GLD (0.40% expense ratio) | $200 (NAV premium) | $4,000 | Minimal ($10 bid/ask) | $4,210 (~0.42%/yr) |
| GLDM (0.10% expense ratio) | $200 | $1,000 | Minimal ($10) | $1,210 (~0.12%/yr) |
| Pooled gold (0.75% storage) | $1,500 | $7,500 | $1,500 | $10,500 (~1.05%/yr) |
| Allocated vault (1.00% storage) | $3,000 | $10,000 | $2,000 | $15,000 (~1.50%/yr) |
| Physical at home (no insurance) | $5,000 | $0 + $1,500 safe (amortized) | $7,500 (15% retail dealer spread to sell) | $14,000 (~1.40%/yr) — assumes no theft |
| Physical at home (with rider) | $5,000 | $5,000 (insurance rider, 0.5%/yr) | $7,500 | $17,500 (~1.75%/yr) |
| Gold IRA (allocated + IRA custody) | $4,000 | $13,000 (storage + custody) | $2,000 | $19,000 nominal, but tax-deferred (~1.9%/yr nominal; effective rate after tax shield depends on bracket and time of distribution) |
What this table shows: GLDM is the cheapest by a wide margin if all you want is price exposure. Physical at home looks cheap without insurance but the sell-side spread (retail dealers buy back at 80–90% of spot) eats most of the apparent savings. Allocated storage is the middle, with the counterparty and jurisdictional benefits the others lack.
See the 10-year cost model for your position size
The inheritance question
This is where the framework changes most. The cost comparison above assumes you'll sell. For an inheritance use case — where the position passes to the next generation — the cost is not what matters. The friction at handoff is what matters.
| Asset | Inheritance friction |
|---|---|
| Gold ETF | Brokerage transfer. Standard. Beneficiary form. Tax basis steps up. |
| Pooled gold | Account transfer at the mint. Beneficiary form. Tax basis steps up. |
| Allocated vault | Bar re-titling at the vault. Some friction (death certificate, executor coordination). Tax basis steps up. |
| Physical at home | The hardest case. No automatic record. No transfer infrastructure. If the heir doesn't know the safe exists, the gold is effectively lost. If the heir does know, they inherit it with no documented basis, which becomes a tax problem at sale. |
| Gold IRA | Beneficiary form on file. Inherited IRA rules apply (RMDs, distribution period). Tax-deferred status passes. |
The case for allocated vault storage over home storage gets stronger the closer you get to a real inheritance scenario. The metal is the same; the documentation around it is not.
The single most important inheritance principle: whatever form you hold the gold in, document the holding. Photographs, serial numbers if allocated, vault statements, beneficiary forms, and a current valuation should all live in one place. That's the layer Heirfolio adds on top of whichever ownership form you pick.
The bottom line
Five honest verdicts:
- For maximum liquidity and minimum cost: gold ETFs. Specifically GLDM (0.10% expense ratio) or IAU (0.25%). If your reason for owning gold is portfolio allocation, this is the answer.
- For middle-ground physical exposure: pooled gold or small allocated positions. Lower minimums than full allocated, real metal exposure, conversion path to physical at threshold.
- For long-term physical exposure with low counterparty risk: allocated vault storage. Specific bars, audited, insured at Lloyd's, jurisdictionally diverse.
- For privacy and possession: physical at home, in modest amounts. Treat as an emergency reserve, not the bulk of the position.
- For tax efficiency over decades: gold IRA. If you have a 10+ year horizon and meaningful expected gains, the tax shield compounds.
The most common mistake is buying GLD when you actually wanted allocated gold, or buying physical at home when you needed something insured and inheritable. Match the form to the goal. The cost difference is real but smaller than the difference between holding the wrong form for a decade.
Document any gold you own in Heir Protocol — free for 5 items
Frequently asked questions
Is GLD actually gold?
GLD is a share in a trust (SPDR Gold Shares) that holds gold bars in HSBC's London vault. The trust's gold is real; the shares represent a fractional interest in it. For retail investors, GLD is convertible to physical gold only via Authorized Participants in baskets of 100,000 shares. Practically, this means retail GLD holders cannot take physical delivery of the underlying gold. The shares track the gold price closely but the right of physical delivery does not exist for retail.
Why would I buy allocated gold instead of GLD if it costs more?
Three reasons. First, allocated gold is specific bars titled in your name, not a fractional claim on a trust's gold. Second, allocated gold is deliverable — you can request the physical bars at any time. Third, allocated gold is held in jurisdictions you choose (Canada, Switzerland, US) rather than only in London. For position sizes where the storage cost is justifiable, the additional rights are meaningful.
What is the difference between allocated and unallocated gold?
Allocated gold is specific, serial-numbered bars titled to you. They appear on the vault inventory with your account. Unallocated (also called pooled) gold is a pro-rata interest in a pool of bars — you own X grams of gold in the pool but not any specific bar. Allocated has stronger ownership rights (you can demand the specific bars); unallocated has lower fees and lower minimums.
How much gold should I own?
This is portfolio-allocation territory, and the right answer depends on your overall financial picture. Most allocation frameworks (Permanent Portfolio, Endowment, etc.) suggest 5–25% in gold for a household using gold as a diversifier. Bitcoin-and-gold-together households often run 10–30% across both. For inheritance-focused holders, the question is less about percentage and more about specific pieces and structures the next generation can handle.
Can I roll my 401(k) into a gold IRA?
Yes, in most cases. The standard path is a direct rollover from a 401(k) (or a Traditional IRA) into a self-directed IRA at a custodian that allows precious-metals investments, then a purchase of IRS-approved bullion through that custodian. The rollover itself is not a taxable event. Annual custodial fees ($100–$300) and storage fees (0.5–1.2%) apply. Only IRS-approved coins and bars qualify — not all bullion does.
Is it safe to keep gold at home?
It can be, with caveats. The main risks are theft, fire, and insurance under-coverage. Most homeowner policies cap precious-metals coverage at $1,000–$5,000 without a specific rider, and even with a rider, claims for stolen gold are notoriously difficult to substantiate. For amounts above roughly $10,000, allocated vault storage typically wins on the risk-adjusted math. For modest amounts ($1,000–$5,000) treated as an emergency reserve, home storage is reasonable. See our true cost of storing gold at home guide.
What's the spread on selling allocated gold?
Typically 1–3% off spot at major vault operators (Royal Canadian Mint, Delaware Depository, Brinks) for institutional bars and Mint products. Retail dealers selling back to wholesalers face 5–15% spreads on jewelry-grade items, which is one reason allocated storage in standardized bars is more liquid than retail bullion held at home.
Is gold or Bitcoin a better long-term store of value?
Different question, different time horizon. Gold has 5,000 years of monetary history; Bitcoin has 17. Gold's annual supply growth is ~1.5%; Bitcoin's is currently ~0.85% and falling to zero by 2140. Gold is physical and jurisdiction-bound; Bitcoin is digital and jurisdiction-free. Most thoughtful holders today hold both — gold for the proven multi-millennium track record, Bitcoin for the next-era monetary properties. See our gold vs Bitcoin vs stocks comparison for the long-run data.
What to do next
If you want price exposure to gold at the lowest cost: open a brokerage account, buy GLDM or IAU.
If you want real metal held in your name, ready to deliver: buy allocated gold at the Royal Canadian Mint. Minimum positions start at $1,000; conversion to physical kicks in at the 1 kg threshold.
If you already own physical gold and want to document it for inheritance: build a free Heir Protocol. Photographs, weights, valuations, and beneficiary designations live in one place that your family can find.
The metal is real either way. The structure around it is what determines what your family can do with it in 30 years.
Michael Tanguma is the founder and CEO of Heirfolio. He previously founded Onramp Bitcoin, a Bitcoin financial services firm focused on multi-institution custody for individuals and institutions. This article was reviewed for accuracy by Diana Cruz, a GIA Graduate Gemologist and Heirfolio's Valuation Lead. Cost data current as of May 25, 2026; expense ratios verified against SPDR, iShares, Aberdeen, and World Gold Council published data. Storage rates verified against Royal Canadian Mint, Brinks Global Services, and Delaware Depository published schedules. Gold IRA custodial rates verified against Equity Trust, STRATA Trust, and Kingdom Trust public fee schedules.