How to Invest in Gold: Physical Bullion, Miners, or Gold ETFs?

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It’s no secret that gold has been on an impressive run. After delivering a roughly 60% return in 2025, gold emerged as the best-performing major asset class of the year, beating out global equities and bitcoin.1 And the momentum has continued into 2026. As of March 4, gold is already up approximately 17.5% year-to-date, an eye-catching result, especially given that equity markets have also been strong.2

Returns like these naturally raise questions for investors. Will the rally continue? And perhaps more importantly, how can investors gain exposure to gold in a practical, efficient way?

While no one has a crystal ball, understanding why gold has performed so well, and the different ways investors can access it, can help inform where it may fit within a diversified portfolio.

Does Gold’s Bull Market Have Legs?

Gold’s recent strength has been supported by several macroeconomic forces which have been working in its favour.

Historically, gold has thrived during periods of geopolitical uncertainty. When global tensions rise, whether due to military conflict, political instability, or shifting trade relationships, investors often seek assets perceived as stores of value. Gold has long played that role, helping protect purchasing power during periods when confidence in governments, currencies, or financial systems is under pressure.

More recently, currency dynamics have also supported gold prices. The U.S. dollar has begun to weaken relative to other major currencies, influenced by a mix of tariff policy changes, evolving interest-rate expectations, and broader trade uncertainty. And with the U.S. dollar becoming less attractive, investors are searching for another safe-haven asset, and are turning to gold in its place.3

Gold’s role as a portfolio diversifier has also come back into focus. Gold has historically shown low correlation to equities, meaning it often behaves differently than stocks during market stress.4 With equity markets running hot and valuations elevated, many investors are becoming more conscious of concentration risk and are looking for more ways to diversify. Gold is frequently one of the first alternatives considered.

While future performance is never guaranteed, these underlying themes, geopolitical uncertainty, currency pressures, and diversification demand, do not appear to be short-lived. As a result, investor interest in gold remains elevated.

How Do Investors Actually Invest in Gold?

When we talk about “the price of gold,” we’re typically referring to the spot price per ounce, quoted in U.S. dollars. As of early March, gold is trading around US$5,127 per ounce.5 But knowing the price and actually investing in gold are two very different things.

One traditional approach is to buy physical gold, such as bars or coins, through a precious-metals dealer. In Canada, investors often gravitate toward products like the one-ounce Gold Maple Leaf coin. However, this route comes with several challenges.

For starters, the all-in cost can be surprisingly high. A one-ounce Gold Maple Leaf currently costs roughly $7,000 CAD, reflecting not only the spot price of gold but also the dealer’s bid-ask spread and the CAD/USD exchange rate.6 These spreads can be meaningful, adding hundreds of dollars to each transaction.

There are also practical limitations. Many gold dealers do not accept credit cards, meaning purchases often require cash. Storage and insurance become considerations once the gold is acquired. And unlike financial securities, physical gold is not easily divisible- you can’t sell a portion of a coin if you only need partial liquidity.

In an era where many investors are accustomed to managing portfolios through online brokerages with a few clicks, physical gold can feel awkward, illiquid, and inefficient.

How ETFs Simplify Gold Investing

This is where gold exchange-traded funds (ETFs) have transformed access to the asset class.

Physical gold ETFs provide exposure to gold bullion while offering the liquidity, transparency, and convenience of a publicly traded security. Investors can buy and sell gold exposure within their existing brokerage accounts, just like they would trade a stock or equity ETF.

Take the BMO Gold Bullion ETF (ZGLD) as an example. As of March 4, ZGLD was trading at approximately $75 per share, allowing investors to gain gold exposure without committing thousands of dollars upfront. Because ETF shares represent fractional ownership of a gold bar, investors can scale their exposure up or down with precision, something that’s impossible with a physical coin.

Liquidity is another key advantage. ETF units can be traded throughout the day on the stock exchange, making it easy to enter or exit positions quickly. This flexibility is especially valuable during periods of market volatility, when access to liquidity matters most.

That said, not all gold ETFs are created equal, and due diligence remains important. Some ETFs use financial derivatives, such as futures contracts or swaps, to replicate gold’s price movements rather than holding physical bullion. While these structures can track gold prices, they introduce additional layers of complexity and counterparty risk.

For investors seeking direct exposure to physical gold, structure matters. ZGLD, for example, holds fully allocated physical gold bars, stored in Canadian vaults under the fund’s ownership. Each unit represents a proportional claim on real, tangible gold—not a derivative contract.

Beyond Bullion: Investing in Gold Companies

Another way to gain exposure to gold is through gold-mining equities, the companies responsible for extracting gold from the ground. This approach offers a very different risk-and-return profile than owning bullion.

Gold mining companies tend to have relatively fixed operating costs. When the price of gold rises, revenue increases while costs remain relatively stable, which can significantly expand profit margins. As a result, gold equities often exhibit leveraged exposure to the price of gold, meaning they can outperform bullion during strong gold markets.

However, that leverage works both ways. Gold mining stocks carry equity risk, which bullion does not. These companies may operate in jurisdictions with elevated geopolitical risk, face regulatory or environmental challenges, and often carry debt on their balance sheets. Operational setbacks, cost overruns, or political developments can impact share prices independently of the gold price.

That said, the potential rewards can be substantial. During 2025, many gold mining stocks more than doubled in value, a level of return rarely seen in broad equity markets. For example, the BMO Equal Weight Global Gold Index ETF (ZGD) returned a whopping 169% in 2025.7 So for investors willing to tolerate higher volatility, gold equities can offer meaningful upside in a strong gold bull market.

To manage risk, many investors choose to access gold equities through an ETF, rather than selecting individual stocks. An ETF provides diversification across multiple companies, helping mitigate single-stock risk.

The ZGD is one such option. ZGD holds 40 large-capitalization gold mining companies from around the world and uses an equal-weighting approach, ensuring no single company dominates the portfolio. This structure helps smooth volatility while still providing exposure to the growth potential of the gold mining sector.

The Bottom Line

Gold can play multiple roles in an investor’s portfolio, whether as a store of value, a diversifier, or a tactical growth opportunity. From physical bullion and gold ETFs to mining equities, there are more ways than ever for investors to access the asset class.

As with any investment, the right approach depends on an investor’s goals, risk profile, and time horizon. But one thing is clear: gold is no longer an inaccessible asset. Today, investors can gain exposure efficiently, transparently, and at a scale that fits their portfolio—without ever needing to store a gold bar at home.

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Sources

1BMO ETFs, MSCI, March 2026. Proxies for asset class returns: The MSCI ACWI returned 22.8% in 2025 (global equities), the Purpose Bitcoin ETF BTCC.J returned -11.8% in 2025, and ZGLD returned 59.5% in 2025. 2 www.kitco.com, March 4, 2026. 3Devaluation of the U.S. Dollar 2025 | Morgan Stanley, August 2025. 4Correlation measures the degree in which two securities move in relation to each other. 5Kitco.com March 4, 2026. 6www.ottawagold.ca, March 4 2026. 7 As of Jan 31, 2026 ZGD returned 8.2% YTD, 8.2% 1 month return, 32.4% over 3 months, 92.8% over 6 months, and 155.0% over the past one year. Longer-term annualized returns were 59.0% over three years, 32.6% over five years, 24.4% over ten years, and 11.2% since inception. ZGD’s inception date is November 14, 2012.

Disclaimer

This article is sponsored by BMO Exchange Traded Funds.

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