Australia Gold and Precious Metals Investing Guide
investing in gold and precious metals in Australia. The guide covers: the gold investment options (the "ways to invest in gold in Australia") — (a) the "gold ETFs" (the "GOLD — the ETFS Physical Gold", the "PMGOLD — the Perth Mint Gold" — the "ASX-traded, the liquid, the low-cost" at the "management fee of 0.15% to 0.40%"), (b) the "physical gold" (the "gold bars and the gold coins" — the "Perth Mint gold bars", the "Gold Maple Leafs", the "Krugerrands" — the "authenticated, the stored in the secure vault or the home safe"), (c) the "gold mining stocks" (the "Newcrest Mining — the NCM, the Evolution Mining — the EVN, the Northern Star Resources — the NST" — the "exposure to the gold price through the company earnings"), (d) the "gold futures and the CFDs" (the "derivative exposure to the gold price" — the "higher risk and the leveraged"), (e) the "gold savings accounts" (the "Perth Mint GoldPass" — the "digital gold at the Perth Mint"); the CGT treatment of the gold (the "capital gains tax on the gold investments") — the gold is the "CGT asset" for the tax purposes — the "capital gain" or the "capital loss" arises on the "disposal of the gold" (the "sale of the gold ETF units, the physical gold or the gold mining shares"); the "50% CGT discount" applies to the "individual Australian resident" who holds the gold investment for "more than 12 months"; the "gold bullion" (the "investment-grade gold of 99.5% or higher purity") is exempt from the "GST" (the "no GST on the gold bullion" — the "A New Tax System (Goods and Services Tax) Act 1999"); the silver and the other precious metals (the "silver, the platinum and the palladium") — the "silver" (the "AG" — the "ETFS Physical Silver" — the "ETPMAG"), the "platinum" (the "PT" — the "ETFS Physical Platinum" — the "ETPMPM") and the "palladium" are the "precious metals" with the "industrial uses" (the "solar panels, the electronics, the catalytic converters"); the silver is subject to the "GST" (the "10% GST on the physical silver purchases") — the investor may prefer the "silver ETFs" (the "no GST on the ETF units as the underlying bullion is held in the "unallocated account" structure).
Gold as a Portfolio Hedge
- Inflation hedge: The gold is the "traditional inflation hedge" — the gold price tends to rise when the "purchasing power of the currency declines" (the "inflation above 3%"). The gold price in Australian dollars has increased from approximately $1,800 per ounce in 2020 to $3,800+ per ounce in 2026 (the "approximate 110% increase over 6 years").
- Portfolio allocation: The "strategic gold allocation" is 5% to 10% of the total investment portfolio. The allocation provides the "diversification benefit" — the gold has the "low correlation" with the "Australian equities and the bonds". The gold allocation can be held through the "gold ETFs" (the "liquid and the low-cost") or the "Perth Mint GoldPass account" (the "digital gold at the market price").
- SMSF gold rules: The "self-managed super fund (the SMSF)" can invest in the "physical gold" and the "gold ETFs" subject to the "sole purpose test" (the "investment must be for the retirement benefits"). The SMSF cannot hold the "physical gold" in the "personal possession" — the gold must be held by the "SMSF custodian" or the "approved gold storage provider".
For the CGT on the investments and the 50% discount, see our Capital Gains Tax Guide →.
Gold Mining Stocks vs Physical Gold
- Gold mining stocks: The gold mining companies (the "producers, the developers, the explorers") provide the "leveraged exposure to the gold price" — the company earnings increase more than the gold price due to the "operating leverage". The gold mining stocks also carry the "company-specific risks" (the "production costs, the reserve depletion, the management quality, the geopolitical risks").
- Physical gold vs paper gold: The "physical gold" provides the "direct ownership" with the "no counterparty risk" but the "storage cost" (the "vaulting fee of 0.5% to 1.0% per annum") and the "liquidity constraints". The "gold ETFs" provide the "ASX liquidity" and the "lower cost" but the "counterparty risk to the ETF issuer" (the "backed by the physical gold held by the custodian").
- Tax efficiency: The physical gold is subject to the "CGT" on the disposal. The gold ETF distributions (the "sell the units") are also subject to the CGT. The gold mining shares pay the "franked dividends" (the "franking credits from the Australian-resident gold miners") and are subject to the "CGT" on the sale.
For the SMSF investment strategies and the compliance, see our SMSF Guide →.