GLD vs. physical gold: costs and trade-offs
Both track the gold price closely over the long run. Neither is a stand-in for the other, and the gap between them shows up in fees, convenience, and what you actually walk away owning.
What GLD actually is
SPDR Gold Shares is an exchange-traded fund holding bullion in trust, with shares representing a fractional claim on it. It trades like any other stock — through an ordinary brokerage account, during market hours, one click to buy or sell.
What physical bullion actually is
Coins or bars from a dealer are direct ownership of a tangible thing. No fund wrapper, no share price, no brokerage account in the middle. What's in your hand — or your safe — is what you own, full stop.
Where the costs diverge
GLD deducts a small ongoing expense ratio from the fund automatically — modest year to year, but it compounds the longer you hold. Physical gold skips that fee entirely, but you'll typically pay a dealer premium above spot when buying, and give some back on the spread when selling. Storage and insurance, if you bother with either, are separate ongoing costs on top.
Liquidity: fast versus dealer-dependent
GLD shares trade continuously during market hours with the tight spreads you'd expect from one of the most heavily traded funds around. Physical gold's liquidity depends entirely on which dealers you have access to, and selling in a hurry usually means accepting a wider spread than a patient sale would get you.
Who's actually holding the gold
GLD's bullion sits with a custodian on shareholders' behalf, under the fund's trust structure — you don't take physical delivery in the ordinary course of owning shares. Physical gold in your own possession cuts that custodial layer out entirely, at the cost of you now being responsible for keeping it safe.
Taxes are genuinely a "check locally" situation
Gold ETFs and physical bullion sometimes get taxed differently depending on where you live and how long you've held them, and the rules shift over time. This isn't something a general article can responsibly summarize — talk to a tax professional before assuming either option comes out ahead.
Reading GLD on this simulator
Because GLD trades as shares, its price level doesn't line up with spot gold's price per ounce on the same axis. That's exactly why the comparison chart rebases both to 100 at the start of the range — so you're looking at relative performance, not one line dwarfing the other.
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This article explains structural differences between an ETF and physical bullion and is not investment, tax, or legal advice.