If any investing asset has had a banner year, it’s gold. After starting 2024 at $2,063.73 per ounce, the precious metal’s price experienced a steady ascent, peaking at a record $2,736.35 per ounce by late October. This impressive rally made gold one of the year’s hottest commodities for both new and seasoned investors. While the price of gold has dipped slightly in the time since — today’s price is $2,677.35 per ounce — the strong upward price trajectory over the past year underscores gold’s enduring appeal.

For those intrigued by gold’s potential, there are numerous ways to gain exposure to the asset, from gold exchange-traded funds (ETFs) and gold mining stocks to futures contracts. However, one of the most popular and beginner-friendly options is physical gold. Owning tangible gold allows investors to hold a piece of wealth in their hands, free from counterparty risks or market intermediaries. It’s an accessible way to invest in a timeless asset, making it especially attractive to those seeking long-term stability.

That said, buying physical gold often comes with a steep price tag, as the premiums, production costs and storage considerations can quickly add up. But by choosing the right forms of gold, it’s possible to build a portfolio of this precious metal while staying within your financial means.

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What are the cheapest ways to invest in physical gold?

If you want to find an affordable way to invest in physical gold, you may want to consider the following options:

Small gold bars

Small gold bars, starting at 1 gram, offer another approachable entry point into physical gold ownership — and are ideal for beginners looking to invest without a significant upfront cost. Produced by reputable refiners and accompanied by assay cards for authenticity verification, these bars combine portability with lower premiums compared to coins of equivalent weight. Their standardized form makes them easy to store and transport, while their widely recognized format ensures good liquidity.

When purchasing small gold bars, just be sure that you’re buying from a reputable dealer, preferably one with third-party certification. If affordability is the main focus, you may also want to avoid bars with excessive branding or unique designs, as these can increase the premium without adding intrinsic value.

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Fractional gold coins

For those who prefer government-issued gold but are concerned about the high price of full-ounce coins, fractional gold coins can be an excellent choice. Fractional coins are available in 1/10-ounce, ¼-ounce and ½-ounce denominations, and while they have slightly higher premiums than full-ounce coins, they remain a cost-effective way to enter the market without saving for months or years. 

These coins are also highly liquid, meaning they can be easily sold or traded if needed. If you plan to purchase fractional coins, though, just make sure to focus on well-known designs and mints to ensure you’re getting fair market value.

Generic gold coins

Generic gold coins refer to coins minted by private companies rather than government mints. These coins often have lower premiums compared to government-issued coins because they don’t carry the same collector value. Examples include privately minted replicas of historical coins or generic bullion coins featuring simple designs.

While generic coins may lack the prestige of a government-issued coin, they offer excellent value for the weight of gold they contain. That said, it’s important to do your homework to avoid counterfeit products. You should also check the coin’s purity, which is usually marked as 99.9% or 24-karat gold.

Investment-grade gold jewelry 

Gold jewelry is not just for adornment — it can also serve as a form of investment, especially if purchased wisely. With this route, be sure to opt for simple designs with high gold content, such as 18-karat or 22-karat pieces, to minimize additional costs associated with intricate craftsmanship. 

Countries like India and the Middle East have robust markets for investment-grade gold jewelry, often sold near the spot price. If you’re traveling to such regions, consider taking advantage of the lower premiums offered there.

Bulk gold

For those ready to invest a larger sum, buying gold in bulk can significantly reduce the overall costs. Dealers often offer discounts on larger purchases, whether you’re buying multiple small coins or a single large bar. This approach allows you to spread premiums across a higher quantity of gold, reducing your cost per gram.

When purchasing in bulk, be sure to work with dealers who provide guarantees for purity and weight. You may also want to look for dealers offering buy-back programs in case you decide to liquidate your holdings in the future.

The bottom line

Investing in physical gold tends to come with a high price tag, but it doesn’t have to strain your finances. There are many affordable options, like gold bars, fractional coins or generic coins, that may be worth considering. With these gold assets, you can start small and gradually build your wealth in a stable and tangible form, allowing you to take advantage of gold’s enduring value without overspending.