Yes, you can buy gold on Robinhood, but only through a gold ETF, not physical gold
Robinhood does not let you buy or hold physical gold bars or coins. Instead, you can buy shares of a gold exchange-traded fund (ETF), which is a fund that tracks the price of gold and trades like a stock. The most common gold ETF on Robinhood is GLD (SPDR Gold Shares), which holds physical gold in a vault and lets you own a piece of it without storing it yourself.
When you buy GLD shares on Robinhood, you own a fractional stake in the gold the fund holds. The price of each share moves with the price of gold. You can buy as little as one share or a fraction of a share, depending on the current price. You can also sell your shares anytime the market is open, just like you would sell a stock.
Other gold ETFs trade on Robinhood as well, including IAU (iShares Gold Trust) and AAAU (Sprott Physical Gold Trust). Each fund has slightly different fees and structures, but they all work the same basic way: you own shares that represent a claim on physical gold held elsewhere.
Key Takeaways
- Robinhood offers gold ETFs like GLD and IAU, which let you own gold without storing physical bars or coins yourself.
- Gold ETFs trade during stock market hours, so you can buy and sell them whenever the market is open, not just during precious metals trading hours.
- Each gold ETF charges an annual fee (called an expense ratio) that reduces your returns, typically between 0.25% and 0.40% per year.
- You can buy fractional shares of gold ETFs on Robinhood, so you do not need a large amount of money to start.
How gold ETFs work on Robinhood
When you search for GLD or IAU on Robinhood, you will see a stock-like ticker page showing the current price, a chart, and the option to buy or sell. You place an order just as you would for any stock: you choose how many shares (or a fraction of a share) you want, set your order type (market or limit), and confirm. The order executes during market hours, which are 9:30 a.m. to 4 p.m. Eastern Time on weekdays when the stock market is open.
The fund itself holds the physical gold in a find vault, usually managed by a bank or specialized custodian. You do not see or touch the gold; you straightforward own shares that represent your portion of what the fund holds. If you sell your shares, you get cash back into your Robinhood account. You cannot ask the fund to send you physical gold bars instead.
Gold ETFs move in price throughout the day as the stock market trades. This is different from the spot price of gold, which is the price at which gold trades in the over-the-counter market 24 hours a day. The ETF price usually tracks the spot price closely, but there can be small differences, especially at market open or close.
Fees and costs of gold ETFs
Every gold ETF charges an expense ratio, which is an annual fee taken from the fund's assets. This fee is deducted automatically and reduces the return you see. GLD charges approximately 0.40% per year, while IAU charges approximately 0.25% per year. AAAU charges approximately 0.80% per year. These percentages may change, so check the fund's prospectus on the ETF provider's website for the current rate.
On top of the expense ratio, you may pay a trading commission when you buy or sell. Robinhood does not charge commissions on stock or ETF trades, so you will not see a separate fee at checkout. However, there is a small difference between the bid price (what buyers will pay) and the ask price (what sellers are asking), called the bid-ask spread. This spread is typically very small for popular ETFs like GLD, but it is a real cost you pay when you trade.
If you hold the ETF in a taxable account on Robinhood (not an IRA), you will owe capital gains tax when you sell at a profit. You may also owe tax on any distributions the fund pays, though most gold ETFs pay very little in distributions because gold does not pay dividends.
Gold ETFs versus other ways to own gold
Gold ETFs are not the only way to own gold. You can also buy physical gold coins or bars from a dealer, store them yourself or in a safety deposit box, and sell them back to a dealer later. Physical gold requires you to arrange storage and insurance, and dealers typically charge a markup when you buy and a lower price when you sell, which can be a significant cost.
You can also own gold through a gold mining stock or a gold mining ETF, which invests in companies that mine gold rather than holding gold itself. Mining stocks move differently than gold prices because they are affected by the company's costs, management, and production. Some investors use mining stocks as a way to get more upside if gold prices rise, but they also carry company-specific risk.
A third option is a gold futures contract, which is a bet on the future price of gold. Futures are more complex, require a special account, and are much riskier than ETFs. Robinhood does not offer futures trading.
Tax treatment of gold ETF gains
When you sell a gold ETF at a profit in a regular taxable Robinhood account, the gain is treated as a capital gain. If you held the shares for less than one year, it is a short-term capital gain, taxed at your ordinary income tax rate. If you held them for more than one year, it is a long-term capital gain, taxed at a lower rate (0%, 15%, or 20%, depending on your income).
Gold itself is classified as a collectible by the IRS, which means long-term gains on physical gold are taxed at a maximum rate of 28%, higher than the standard long-term capital gains rate. However, gold ETFs are not classified as collectibles; they are treated as regular securities. This means your long-term gains on a gold ETF are taxed at the standard long-term capital gains rate, which can be lower than 28%.
If you hold a gold ETF in an IRA on Robinhood, you do not pay tax on gains until you withdraw the money (in a traditional IRA) or never (in a Roth IRA). However, most IRAs do not allow you to hold gold ETFs; they are designed for stocks and bonds. Check with your IRA provider about what investments are allowed.
How to buy gold ETFs on Robinhood step by step
Open the Robinhood app or website and tap or click the search icon. Type "GLD" or "IAU" (or another gold ETF ticker) into the search box. Tap or click on the fund name when it appears in the results. You will see the current price, a price chart, and a green "Buy" button.
Tap or click "Buy" and enter the number of shares you want to purchase, or the dollar amount you want to spend. Robinhood will show you the current price and let you buy fractional shares. Choose your order type: a market order will execute at the current price as soon as the market is open, while a limit order lets you set a maximum price you are willing to pay. Tap or click "Review Order" to see the details, then confirm.
Your order will execute during market hours. Once it fills, the shares will appear in your Robinhood account under the "Stocks" or "Investing" tab. You can see the current value of your position, your gain or loss, and the option to sell anytime the market is open.
Risks and things to consider before buying
Gold prices move up and down based on many factors: interest rates, inflation expectations, currency strength, geopolitical events, and investor sentiment. A gold ETF can lose value just like any stock. There is no may provide that gold will go up in price or hold its value over time.
Gold does not pay interest or dividends, so your only return comes from selling at a higher price than you bought. This is different from stocks, which may pay dividends, or bonds, which pay interest. If gold prices fall, you have no income to offset the loss.
Gold ETFs are liquid, meaning you can sell them quickly during market hours. However, if you need to sell during a market crash or period of high volatility, you may get a worse price than you expected. The bid-ask spread can also widen during volatile periods, increasing your cost to trade.
Frequently Asked Questions
Can I buy gold on Robinhood with fractional shares?
Yes. Robinhood lets you buy fractional shares of gold ETFs like GLD and IAU. You can enter a dollar amount instead of a number of shares, and Robinhood will buy as much as that amount covers, even if it is less than one full share. This makes it possible to start with a small investment.
What is the difference between GLD and IAU?
Both GLD and IAU hold physical gold and track its price closely. The main difference is the expense ratio: GLD charges about 0.40% per year, while IAU charges about 0.25% per year. IAU is slightly cheaper, but both are widely traded and have low bid-ask spreads. The choice between them is usually about which fee you prefer.
Can I convert my gold ETF shares into physical gold?
No. Gold ETFs on Robinhood cannot be converted into physical gold bars or coins. If you want physical gold, you would need to sell your shares, withdraw the cash, and buy gold from a dealer separately. The ETF is designed to give you gold price exposure without the hassle of storage and insurance.
Do I owe taxes every year I hold a gold ETF?
No. You only owe capital gains tax when you sell the ETF at a profit. While you hold it, there is no annual tax bill, even if the price goes up. Most gold ETFs pay very little in distributions, so there is usually no tax until you sell.
Can I buy gold on Robinhood if I have a Roth IRA?
Robinhood offers IRAs, but most IRAs are limited to stocks, ETFs, and bonds. Gold ETFs are stocks, so they may be allowed in a Roth IRA on Robinhood, but you should check your account settings or contact Robinhood support to confirm what investments your specific IRA allows.