The pressure of US dollar depreciation, geopolitical turmoil, and investors are all seeking safe-haven outlets. So is gold the optimal choice? It’s worth calculating clearly.

First, look at long-term returns. Since the collapse of the Bretton Woods system in 1971, gold has maintained an annualized return of about 7%. Although short-term fluctuations are quite large, its properties of inflation resistance and risk mitigation are undisputed. In comparison, the long-term annualized return of US stocks is about 10%, bonds are even lower, with long-term government bonds yielding only 3%-4% annually, and after deducting inflation, the real returns are basically zero. It seems that gold is neither as profitable as stocks nor as stable as bonds, but the key is the risk-adjusted Sharpe ratio — gold’s performance is actually more outstanding.

But here’s a practical issue: how to buy gold?

Buying gold bars or jewelry offline involves a minimum craftsmanship fee of 20 yuan/gram, and subsequent storage, authenticity verification, and resale are troublesome, with concerns about shortchanging. High barriers to entry, poor liquidity, and hidden costs.

In contrast, gold ETFs are different. Management and custody fees are only 0.2%, trading commissions are as low as 0.03%-0.08%, supporting T+0 trading, allowing entry and exit at any time. Buying off-exchange funds is also convenient, with no redemption fee if held for more than 30 days. There’s no need to worry about delivery procedures and authentication issues; funds are credited instantly, with high transparency.

Therefore, for ordinary investors, gold ETFs are the right way to participate in the gold market — low cost, high liquidity, and efficient allocation.