Investing
Is Gold a Good Investment?
Gold vs HSI vs Fixed Deposits — 2026 Full Comparison
Gary Chung（FinKit Editor-in-Chief） · Published：June 6, 2026
Gold prices are at all-time highs — is it still worth buying? What's the difference between physical gold, paper gold, and gold ETFs? How do returns compare against the Hang Seng Index and fixed deposits? A complete analysis.
Where Are Gold Prices Now?
In 2026, gold is trading around HK$20,000 per tael (~HK$540 per gram), up more than 60% from ~HK$12,000/tael in 2020. Key drivers:
How Can You Invest in Gold?
| Method | Entry Cost | Pros | Cons |
|---|---|---|---|
| Physical Gold (bars / grains) | ~HK$20,000/tael | Tangible asset, ultimate safety | Storage required; 2–5% bid-ask spread |
| Paper Gold (bank account) | ~HK$1,000 minimum | No storage needed, easy to trade | Not a physical claim; bank failure risk |
| Gold ETF (e.g. 2840) | ~HK$1,000 minimum | Traded via stock account, high liquidity | Management fee 0.5–1% p.a. |
| Gold Mining Stocks | ~A few thousand HKD | Leveraged upside potential | Very high risk; may not track gold price |
Gold vs HSI vs Fixed Deposits: Real Return Comparison
Assume a HK$100,000 investment in 2020. Here are the 5-year results (2020–2025):
| Investment | 2020 Value | 2025 Value | Return | CAGR |
|---|---|---|---|---|
| Gold | HK$100,000 | ~HK$166,000 | +66% | ~10.7% |
| HSI (TraHK 2800) | HK$100,000 | ~HK$90,000 | −10% | ~−2.1% |
| S&P 500 ETF | HK$100,000 | ~HK$195,000 | +95% | ~14.3% |
| HKD Fixed Deposit (avg. 3%) | HK$100,000 | ~HK$115,900 | +16% | ~3.0% |
Gold has outperformed the HSI and fixed deposits over the past 5 years, though it lagged US equities. However, gold's greatest value is as a safe haven — when stock markets tumble, gold typically rises.
The Risks of Investing in Gold
⚠️ No Cash Flow
Stocks pay dividends, bonds pay interest, property generates rent. Gold generates nothing — your return depends entirely on price movement. If gold stays flat for 10 years, your 10-year return is zero.
⚠️ High Price Volatility
Gold can fall sharply too. In 2013, gold dropped from US$1,900/oz to US$1,050 — a 45% decline. Be prepared for drawdowns of 30% or more.
⚠️ Physical Gold Storage Costs
Physical gold requires a bank safe deposit box (~HK$1,000–3,000/year) or a home safe. These costs eat into your returns.
⚠️ Lower Liquidity than Stocks
Selling a stock takes a second; selling physical gold requires a trip to a gold shop or bank, plus verification. Not ideal when you need cash urgently.
How Much Gold Should You Hold?
Financial experts generally recommend allocating 5–15% of your total portfolio to gold as a hedge against risk and inflation.
Suggested Allocation by Age
Frequently Asked Questions
Gold is at an all-time high — is it still worth buying?
A record-high gold price doesn't mean it's about to crash. Central bank buying, geopolitical instability, and a weakening USD all provide structural support. Consider dollar-cost averaging in gradually rather than a lump sum.
Physical gold or a gold ETF — which is better?
For investment purposes, a gold ETF (e.g. 2840) is more convenient: no storage, tight bid-ask spreads, tradeable via your stock account. Physical gold is only necessary if you want ultimate safety (e.g. hedging against financial system collapse).
Do I need to pay tax on gold gains?
Hong Kong has no capital gains tax — profits from buying and selling gold are tax-free. However, if you trade frequently enough to be considered a trading business, the IRD could treat profits as assessable under profits tax. Retail investors generally needn't worry.
Is silver worth investing in?
Silver is more volatile than gold, with industrial demand (solar panels, electronics) accounting for over half of consumption. Silver outperforms gold in good economic times but falls harder in downturns. Investors with lower risk tolerance should focus on gold.
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