Gold: Is It Time to Add Some Shine to Your Portfolio?

Why investors buy gold

Few investments stir up as much interest as gold, and we’ve had more questions about it this year than ever before. Gold has been through a remarkable run, and with the tax changes from the 2026–27 Federal Budget reshaping property and share investing, many clients are looking for other places to put their money.

People have treated gold as a store of wealth for thousands of years. Investors buy it for several reasons:

• A hedge against inflation. Gold has tended to hold its purchasing power over long periods, while cash and bond returns can be eaten away by rising prices.
• A safe haven in uncertain times. During financial crises, wars and market sell-offs, investors often move money into gold, which can push its price up just when other assets are falling.
• Diversification. Gold often moves differently from shares and property, so a modest allocation can smooth out the ups and downs of a portfolio.
• Protection against a falling Australian dollar. Gold is priced globally in US dollars. When the Australian dollar weakens, the local gold price usually rises.
• No counterparty risk. Physical gold doesn’t rely on a company, bank or government keeping its promises.
• Central bank demand. Central banks around the world have been steady buyers of gold in recent years, which has supported prices.

Gold also has its downsides. It pays no income: no rent, no dividends, no interest. Your return depends entirely on the price going up. It can also be volatile. In Australian dollar terms, gold peaked at around $7,700 an ounce in January 2026 and has since fallen back to around $6,000. Gold works best as one part of a diversified portfolio, not as a bet on its own.

How to invest in gold

There are two broad ways to own gold: hold the physical metal, or invest through a fund or exchange-traded product.

Physical gold

Bars and coins. You can buy investment-grade gold bars and bullion coins from mints such as The Perth Mint and from reputable bullion dealers. Sizes range from a single gram to a kilogram or more.

A few things to watch:

• Premiums and spreads. Dealers sell above the spot price and buy back below it. On smaller bars and coins the gap can be significant. On a one-ounce bar it can be around 5%, so the price has to rise just for you to break even.
• Storage and security. Gold kept at home needs a good safe and proper insurance, and many home contents policies cap cover for bullion. The alternatives are a bank safe deposit box or a professional vault. The Perth Mint’s depository is backed by a Western Australian Government guarantee.
• Allocated vs unallocated. In an allocated vault account, specific bars are held in your name. In an unallocated account, you have a claim on a pool of gold. Allocated storage costs more but gives you clearer ownership.
• Identification. Dealers are subject to anti-money-laundering laws and will ask for ID on larger transactions.

Exchange-traded funds (ETFs) and managed funds

For most investors, the simplest way to get gold exposure is through the ASX:

• Physically backed gold ETFs hold real gold bullion in a vault for their unitholders. You buy and sell units through a share broker like any listed share. Some are currency hedged, meaning they remove the effect of movements in the Australian dollar.
• Perth Mint Gold (ASX: PMGOLD) is a quoted product backed by gold held at The Perth Mint.
• Gold mining shares and funds give exposure to companies that produce gold. Their prices often move further than the gold price in both directions, and they carry company-specific risks, but they can pay dividends.
• Managed funds that invest in gold or resources are also available, typically with higher fees than an ETF.

ETFs avoid the storage, insurance and buy-sell spread issues of physical gold. You can buy in small amounts, sell within seconds during market hours, and track the value in the same place as your other investments. The trade-off is ongoing management fees and the fact that you don’t hold the metal yourself.

How gold is taxed

Capital gains tax. For most investors, gold bullion and gold ETF units are CGT assets. You pay tax only when you sell or otherwise dispose of them, not while they rise in value. Any capital gain is added to your taxable income for that year.

The CGT changes from 1 July 2027. Gold is caught by the new CGT rules like any other asset. For gold held longer than 12 months by individuals, trusts and partnerships, gains that arise up to 30 June 2027 still receive the 50% discount. Gains after that date are calculated using cost base indexation and are subject to the new 30% minimum tax. If you’re sitting on a large gain, the timing of a sale is worth discussing with us.

No income, no deductions. Because physical gold produces no income, costs such as storage and insurance generally can’t be claimed as an annual deduction. Depending on the circumstances, some of those costs may form part of the cost base and reduce your gain when you sell. Keep every receipt.

Coins can be collectables. Gold coins and jewellery may be treated as collectables for tax purposes, especially coins valued for their rarity rather than their metal content. Capital losses on collectables can only be offset against capital gains on other collectables.

Traders are taxed differently. If you buy and sell gold frequently as a business, profits may be taxed as ordinary income rather than capital gains, with no CGT discount.

GST. Investment-grade gold of at least 99.5% purity, in bar, wafer or coin form, is generally not subject to GST. Jewellery, collector coins and other gold items usually do attract GST.

Record keeping. Keep your purchase invoices, the weight and purity of each item, storage and insurance costs, and sale records. Without them, working out your capital gain can be difficult and costly.

Yes, your SMSF can invest in gold

Self-managed super funds can invest in gold, and many SMSF trustees do. There are some important rules:

• Check your deed and investment strategy. Your trust deed must allow the investment, and your investment strategy should address why gold fits the fund’s objectives and how it contributes to diversification and liquidity.
• The sole purpose test. The gold must be held purely to provide retirement benefits. Members and their relatives can’t use or enjoy it.
• Buy at arm’s length. The fund must buy from an unrelated party at market value, and the gold must be held in the fund’s name.
• Bullion vs collectables. Investment-grade bullion bars are generally not classed as collectables. Gold coins valued above their metal content and jewellery generally are. Collectables fall under strict super rules: they must be insured in the fund’s name within seven days, must not be stored at a related party’s home, and the storage decision must be documented.
• Storage. Even for bullion, auditors strongly prefer independent vault storage. Keeping the fund’s gold at a member’s home invites questions about the sole purpose test.
• Valuation and audit. The gold must be valued at market value every year, and your auditor will need evidence that it exists, where it is held, and that it is insured.
• Tax inside super. Gold held in an SMSF is taxed at 15%, or an effective 10% on gains from assets held longer than 12 months. The 2027 CGT changes do not apply to super funds. In pension phase, gains on assets supporting pensions can be tax-free.

For many SMSFs, a physically backed gold ETF is the simplest option. It avoids storage and insurance issues, makes year-end valuation easy, and does not raise any collectables questions.

Talk to us before you buy

Gold can play a useful role in a well-diversified portfolio, but how you buy it, how you hold it and which structure owns it all affect your after-tax return. That is true whether you hold it personally, in a trust or company, or in your SMSF. With the CGT rules changing from 1 July 2027, the timing of purchases and sales matters too.

At Blackfox Financial Group, our tax, SMSF and financial planning teams can help you work out whether gold suits your goals and how to hold it in the most tax-effective way.

Talk to us. Call the Blackfox team on (03) 8910 8940 or speak with your Blackfox adviser to book a time to review your investment and tax strategy.

General advice warning: This article contains general information only and does not take into account your personal objectives, financial situation or needs. Before acting, consider whether it is appropriate for you and read the relevant product disclosure statement. Seek personal tax and financial advice before making any investment decision.

Mike Carter
Managing Director
BLACKFOX Financial Group