A Gold 401k is invested in gold in one of several methods. 1. The 401K funds are invested in physical gold, such as bars or bullion. These bars are held in a secure location to protect them from theft. 2. The Gold 401k is invested in gold certificate. Instead of owning the gold out right, the individual owns certificates redeemable for gold. These certificates have the benefit of being a trade-able commodity without having the security hazard of owning gold. 3. The 401K can be invested in gold coins. Unlike raw bullion or bars, the coins have a collector’s market as well as value of the raw material from which it is made. This makes coins potentially more lucrative but less predictable in value. 4. Exchange Traded Funds can be based on a combination of these investments. These Exchange Traded Funds or ETFs can be a mix of precious metal certificates, actual gold options, and even stock in companies that mine gold.