A Beginner’s Guide to Investing in Gold

An IRA stands for Individual Retirement Account. A regular IRA lets you save money for retirement and get tax breaks on your contributions. There are two main types of IRAs—Traditional and Roth. 

With a Traditional IRA, your contributions may lower your taxes now and your withdrawals in retirement are taxed. For a Roth IRA, your contributions come from money after taxes but your withdrawals in retirement won’t be taxed.

A precious metals IRA works like a regular IRA but instead of just stocks, bonds, or mutual funds inside, you can hold physical gold, silver, and other precious metals. Gold IRAs come as Traditional or Roth too with similar tax rules. 

So in short, a gold or precious metals IRA gives investors another way to diversify retirement savings and hedge against stock market ups and downs by including precious metals.

This article explains what a precious metals IRA is and how it works. We’ll explain how to set up a Gold IRA account, the different metals allowed, tax issues, and fees. We’ll also cover managing your metals investments long-term. 

Should you get a gold IRA? See here for more details.

Opening a Precious Metals IRA

Choosing a Brokerage

The first step is selecting a self-directed IRA brokerage that allows physical precious metals like gold and silver to be held in an IRA account. Top custodians include Goldstar Trust, Birch Gold Group, and American Hartford Gold Group. 

Traditional vs Roth

Precious metals IRAs come in both traditional and Roth variants, matching the same tax rules as regular brokerage IRAs. Withdrawals from traditional IRAs are taxable as income, while qualified Roth distributions are tax-free in retirement. 

Initial Funding

You can open a precious metals IRA by transferring funds from an existing qualified retirement plan or making new cash contributions up to the annual IRA limits ($6,000 in 2023 or $7,000 if age 50 or older). 

Payment Methods

Brokerages accept checks, wire transfers, or IRA rollover deposits. Ensure funds are marked appropriately for tax year designation. Watch fees for certain transfers which can negate small deposits quickly.

Purchasing Physical Metals

Once established, your account may be used to buy eligible gold, silver, and platinum coins and bars from approved dealers. The custodian in high-security vaults provides storage. 

Ongoing Contributions

After initial setup, periodic purchases can continue contributions up to annual limits. Dollar-cost averaging is a strong strategy for long-term accumulation. 

Picking Physical Gold or Gold Funds

Investing in Gold

There are two main options when putting gold or gold funds into your IRA. With physical gold, you directly own coins and bars approved by the IRS and can store them with gold investment companies, who’ll act as your custodians. You can own coins like American Eagles or Canadian Maple Leafs. 

Precious coins and bars come in different sizes. The smaller 1-gram to 1-ounce sizes are more popular and easier to sell if needed. Larger 100-ounce bars exist too but aren’t as liquid. 

Rare or unusual pieces can also be tougher to sell. Owning physical metals means prices may change more than shares in reaction to little shifts in gold value. You also pay premiums over bullion value.

Gold funds let you invest without the hassle of storage. Exchange-traded funds like GLD simply track the gold market. Mutual funds have managers picking stocks. Shares have slightly lower fees than physical gold. 

They also charge commissions for trades. However, funds may be more liquid than shipping heavy coins and bars around. 

Diversifying with both physical metals and low-cost gold funds gives exposure to the precious metal, without relying solely on bullion which has volatility and storage cost risks. New investors often find funds easiest since minimums are low. They let you start investing small amounts. Physical metals work better for bigger portfolios where fees are less of an issue.

Key Factors for Research

Investing in Gold

When putting together your investment, it’s important to research key factors first.

The Spot Price

This is the fluctuating market value per ounce that drives gold prices. Understand what causes price swings like inflation, currency values, and economic uncertainty. 


In addition to the spot price, coins, and bars have extra costs above for desirability. Know average premium amounts.

Reliable Dealers

Purchase from trusted dealers with good reputations for security and buyback programs if selling. Sites like Kitco can help research dealers.

Major Mints

Top producers like the U.S. Mint and Royal Canadian Mint make coins that trade easily. Avoid lesser-known mints with smaller markets.  


Work with experienced IRA firms that securely and safely hold your metals with insurance while allowing transactions.

Storage and Insurance

Find out about vault security and coverage for metals during shipping or storage. Understand replacement policies too.  

Background Checks

Confirm dealers, mints, and custodians are licensed without complaints or past issues.  


Sites like BBB provide customer service and complaint resolution ratings. Higher is better.

Creating Your Portfolio

When putting together your portfolio, you should diversify your investments. Invest some of your funds across different types of metals including gold, silver, and platinum in the form of coins and bars.

Most experts recommend setting aside 5-20% of your total retirement funds for metals. A common mix is 60% in physical gold, 30% in silver coins and bars, and 10% in platinum. However, you can adjust the amounts based on your comfort level and retirement plans. 

It’s a good idea to review your portfolio holdings every year or every two years. During reviews, adjust the amounts to get back to your original targets and lock in any profits since the last review time. 

Staying informed on what influences metal prices can help you recognize good opportunities when prices dip temporarily. Using dollar cost averaging by investing fixed automatic sums regularly is also better than trying to precisely time the market. 

Rounding out your portfolio with traditional bonds or stock funds too is important to further balance the risks. Aim for around 20-40% of your funds, not in metals. 

Every 5-10 years, reorganize things to fit your age, plans for retirement, and risk tolerance as life changes over the decades. Keeping detailed records of every purchase and sale amount helps track returns over time for balancing tasks and capital gains calculations later on.

Monitoring and Managing Investments


Review your holdings monthly or quarterly. See how returns compare to when you began. Make adjustments as needed. Watch for broader economic shifts too.

Dollar Cost Averaging

Set up automatic investments of fixed amounts regularly. Take advantage when metal prices fluctuate without trying to time the market perfectly.

Price Points

Note each purchase cost to determine taxes easily later. The first items you buy are first sold normally.


Yearly or after big price swings, sell high and buy low to get back to original ratios. Automating prevents emotional decisions.

Fund Performance 

Check managed funds for leadership or portfolio changes. Replace laggards periodically.

Account Reports

Verify statements match your records for accuracy. Clear up any discrepancies with your custodian.

Cashing in

Early withdrawals before age 59.5 incur fees, but exceptions exist like disability or first home buy. Strategize needs carefully.

In Closing 

A gold IRA provides investors with a flexible way to diversify their retirement savings beyond traditional stocks and bonds by including physical precious metals. With the proper research and expert guidance, individuals can establish a self-directed precious metals IRA account to benefit from the potential hedging qualities of tangible assets while still enjoying important tax advantages. 

While metals do experience price fluctuations, a properly constructed precious metals portfolio as one part of a balanced, full-spectrum approach can help mitigate overall risk exposure and better insulate retirement funds from long-term inflation and macroeconomic threats.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button