Gold has been in the news a lot lately because of it's increase in value over the last two years.
At the start of 2023, the price of an ounce of gold was under $2,000. Today, it's over $3,500 an ounce.
If you're one of the many folks who owned gold, selling it may seem like a smart move after such a quick move.
The challenge with gold is that the IRS classifies it and other precious metals as collectibles. With the stock market, if you owned stock for over a year, your gains are taxed at long term capital gains rates. Those are typically much lower than your ordinary income tax rate.
With a collectible like gold, you don't get such favorable tax treatment. With gold, your gains are taxed at a maximum of 28% if held for over a year. If you are a high income earner and subject to the net investment income tax, you will have to pay an additional 3.8%.
Unfortunately, if you've already realized the gain, there's isn't much you can do as you've already sold the asset and booked the gain. There are, however, steps you can take to avoid or minimize this situation in the future.
Invest within Gold IRAs
Gold IRAs are self-directed IRAs that allow you to own gold bullion. You get all the tax benefits of an IRA, whether it's a tax-deferred Traditional IRA or a tax free Roth IRA, but you're permitted to hold gold because it's warehoused in an IRS-approved secure depository.
Your transactions are all within the IRA so there are no immediate tax consequences for buying and selling. With a Roth IRA, you never pay taxes on gold profits and it is the only way to avoid them entirely. With a Traditional IRA, you are only deferring the taxes but will pay ordinary income taxes on the withdrawals.
The downside is that you can never take physical possession of the gold. If you view it strictly as an investment, rather than a store of value in times of crisis, this isn't an issue.
You can learn more about Gold IRAs and request a free guide here.
Invest in Gold Mining Stocks
There are a few ways to get exposure to gold without owning physical gold.
You can invest in companies that mine gold. Since gold mining company profits depend on the spot price of gold, you can capture the price action of gold while maintaining the capital gains tax rates since you own shares of stock.
The benefit of this is that you get exposure to gold in a vehicle that the IRS recognizes as a security – stock. Gold itself is considered a collectible but stock is a security, so you get the favorable tax treatment.
The drawback is that don't own any gold. You also face the volatility of the stock market and the execution risk of the company itself. It's exposure to gold but not a very direct one, you face additional risks you wouldn't have if you were only investing in gold.
Which leads to the next option – Gold ETFs.
Invest in Physically-Backed Gold ETFs
There are exchange traded funds that simply buy gold. And it's trivial for you to buy shares of funds that hold physical gold. It does not matter that the fund only holds gold, you still get favorable tax treatment regardless of what the ETF invests in.
SPDR Gold Shares (GLD) is an example of an ETF that holds gold bullion. It is simply a trust that holds tonnes of gold, 990.56 tonnes as of 9/3/2025.
When you buy shares of GLD, you gain exposure to gold without the need or requirement to take physical delivery. And since it is an ETF, you get the favorable tax treatment for long term capital gains.
Much like every alternative on this list, you can never take physical delivery of the gold. You own shares of the trust and it does represent an ownership interest, but it's in the trust and not gold itself.
Invest in Futures-Based Gold ETFs
One final way to get exposure to gold without buying bullion is to consider futures-based gold ETFs. Rather than acquiring gold itself, these exchange traded funds invest in gold futures contracts. These futures contracts are a way to get exposure, usually leveraged, to gold without ever buying bullion.
With a futures contract, you reach an agreement to buy an amount of gold at a predetermined price at a future date. As the spot price of gold moves, the value of the contract changes. Bundle a lot of these contracts together and you have yourself an asset – which is what futures-based gold ETFs do.
This is the most distant you could be from gold while still getting direct exposure. This reduces the cost but since these are leveraged, can greatly increase the risk and volatility.
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