Good grief, taxes!
Gold’s return is solely based on the price going up, followed by the choice to sell and realize the gain. Capital gains tax rates are progressive, meaning taxpayers in the 10% and 15% tax brackets pay no tax on long-term gains on most assets; taxpayers in the 25%, 28%, 33%, or 35% income tax brackets face a 15% rate on long-term capital gains. For those in the top 39.6% bracket for ordinary income, the rate is 20%. Nevertheless, the IRS considers gold in most cases to be a collectible, like art, and thus subject to the short-term rate equal to your ordinary income tax rate or, if held for more than a year, a higher capital gains rate on collectibles of 28%.