How Do You Spend Gold
Using gold as money has gotten complicated with all the investment options, liquidity concerns, and practical spending questions flying around. As someone who has owned physical gold and explored various ways to convert it to cash, I learned everything there is to know about actually using gold wealth. Today, I will share it all with you.
The Reality
Probably should have led with this section, honestly—you can’t walk into a grocery store and pay with gold coins. Gold is a store of value, not a practical medium of exchange. To “spend” gold, you first convert it to currency.
Converting Gold to Cash
That’s what makes gold liquidity endearing to us precious metals holders—multiple options exist:
- Coin dealers: Immediate cash for bullion coins
- Pawn shops: Quick but typically lower prices
- Online dealers: Ship your gold, receive payment
- Private sales: Highest prices but requires finding buyers
Gold-Backed Payment Options
Some services now offer debit cards backed by gold holdings. You spend dollars, but the card draws from your gold account, selling small amounts as needed. These offer convenience at the cost of fees.
Tax Implications
Selling gold triggers capital gains taxes on any profit. Gold is classified as a collectible, potentially facing higher rates than stocks. Keep purchase records for accurate cost basis calculations.
Gold as Collateral
Rather than selling, some people borrow against gold holdings. This provides liquidity while maintaining ownership—useful if you expect gold prices to rise.
Best Practices
Gold works best as long-term savings, not spending money. Keep enough liquid cash for expenses; hold gold for wealth preservation and inflation protection.
