E*TRADE offers several ways to invest in gold, but you won’t be buying physical bars or coins through the platform. The most common approach is purchasing gold ETFs, which trade commission-free on E*TRADE just like stocks. You can also trade gold futures if you want more direct exposure, though that requires a higher account balance and a separate approval process.
Gold ETFs: The Simplest Option
Gold ETFs hold physical gold in vaults on your behalf, and each share represents a small fraction of that stored metal. The price of the ETF tracks the spot price of gold closely, so you get exposure to gold’s price movements without dealing with delivery, storage, or insurance. On E*TRADE, buying a gold ETF works exactly like buying a stock: search the ticker, enter the number of shares, and place your order.
E*TRADE charges $0 commission on all ETF trades, which means the only ongoing cost is the fund’s expense ratio, a small annual fee expressed as a percentage of your investment. Here are four widely held gold ETFs, all available on E*TRADE:
- IAUM (iShares Gold Trust Micro) — 0.09% expense ratio, the lowest among major gold ETFs. On a $10,000 investment, that’s $9 per year.
- GLDM (SPDR Gold MiniShares Trust) — 0.10% expense ratio. A popular low-cost choice from the same company behind the original GLD fund.
- FGDL (Franklin Responsibly Sourced Gold ETF) — 0.15% expense ratio. This fund screens for gold that meets responsible sourcing standards.
- IAU (iShares Gold Trust) — 0.25% expense ratio. One of the largest and most liquid gold ETFs, though its fee is noticeably higher than the newer alternatives.
All four of these funds posted roughly 41% returns over the past year, reflecting gold’s strong run. The differences in performance are almost entirely explained by the difference in fees. For most investors, picking the lowest expense ratio makes sense since every fund is tracking the same commodity.
How to Place a Gold ETF Trade
If you already have a funded E*TRADE brokerage or IRA account, buying a gold ETF takes about two minutes. Log in to the platform, type the ETF ticker (like IAUM or GLDM) into the search bar, and click “Trade.” Choose whether you want a market order, which buys at the current price, or a limit order, which lets you set the maximum price you’re willing to pay. Enter the number of shares and submit.
Gold ETFs trade during regular market hours, 9:30 a.m. to 4:00 p.m. Eastern, and E*TRADE also supports extended-hours trading if you want to react to overnight price moves. Your order will settle in one business day (T+1), at which point the shares appear in your account.
There’s no minimum investment beyond the price of a single share. GLDM and IAUM both have relatively low share prices compared to the original GLD fund, making them easier to buy in small amounts. E*TRADE also supports fractional shares on some securities, so check whether your chosen ETF is eligible if you want to invest a specific dollar amount rather than buying whole shares.
Gold Mutual Funds
E*TRADE also carries mutual funds focused on gold. Some invest in physical gold, while others hold shares of gold mining companies, which behave differently from the metal itself. Mining stocks can amplify gold’s moves in both directions because the companies’ profits depend on their production costs relative to gold’s price.
No-load, no-transaction-fee gold mutual funds cost $0 to buy on E*TRADE. Load funds charge an upfront or deferred sales charge, which is disclosed in the fund’s prospectus. Mutual funds price once per day after the market closes, so unlike ETFs, you can’t trade them at a specific intraday price. For investors who simply want to track the price of gold, ETFs are generally a better fit because of their lower fees and real-time pricing.
Gold Futures Contracts
For experienced investors, E*TRADE supports gold futures trading through its futures-enabled accounts. A standard COMEX gold futures contract (ticker GC) represents 100 troy ounces of gold. You don’t pay the full value of the contract upfront. Instead, you post margin, essentially a deposit, and your account is credited or debited daily as the price moves.
Maintenance margin requirements for a single gold futures contract currently run around $28,000 to $29,000, depending on the contract month. Your initial margin requirement will be somewhat higher. This means futures are a capital-intensive way to trade gold, suited to investors who want leveraged exposure or who are hedging an existing position.
E*TRADE charges $1.50 per contract, per side for futures trades. “Per side” means you pay that fee when you open the position and again when you close it. Exchange fees and National Futures Association fees are added on top of that commission. To access futures on E*TRADE, you need to apply for futures trading approval separately from your standard brokerage account. The application asks about your trading experience, financial situation, and understanding of leveraged products.
Futures contracts expire on set dates, so if you want ongoing gold exposure, you’ll need to “roll” your position by closing the expiring contract and opening a new one. This adds complexity and transaction costs that ETF investors never deal with.
What About Physical Gold?
E*TRADE does not sell gold bars or coins. As the platform’s own guidance notes, owning physical bullion requires delivery and storage, which falls outside the scope of an online brokerage. If you want to hold actual metal, you’d need to buy from a precious metals dealer separately. Keep in mind that physical gold comes with storage costs, insurance, and wider buy/sell spreads compared to ETFs.
Gold ETFs give you nearly identical price exposure with far less hassle. The gold backing those funds is stored in secure vaults and audited regularly, so you’re effectively owning gold without the logistical headaches. The trade-off is that you never take possession of the metal, which matters to some investors but is irrelevant to most.
Tax Considerations for Gold Investments
Gold ETFs that hold physical metal are classified as collectibles by the IRS, which means long-term capital gains are taxed at a maximum rate of 28% rather than the lower 15% or 20% rate that applies to most stocks and stock ETFs. This applies when you hold shares for more than a year and sell at a profit. Short-term gains (held one year or less) are taxed as ordinary income, same as any other investment.
Holding gold ETFs inside a tax-advantaged account like an IRA eliminates this issue, since gains aren’t taxed until withdrawal (traditional IRA) or aren’t taxed at all (Roth IRA). If you’re planning a significant gold allocation, using a retirement account on E*TRADE can be a meaningful tax advantage over a standard brokerage account.
Gold futures have their own tax rules. Under Section 1256, futures gains are split 60/40 between long-term and short-term capital gains rates regardless of how long you held the contract. This can result in a lower effective tax rate than selling a gold ETF held for under a year.