Precious metal IRA: How to invest in gold and silver

They can be a way to diversify, but may carry more risk

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Investing in precious metals can be a great way to diversify your investment portfolio. And with a precious metals individual retirement account, you can invest in physical precious metals within a tax-advantaged retirement account.

But precious metals can be more volatile than some traditional investments and may underperform compared with others. Before investing, it’s important to understand how it works and the pros and cons of using a precious metals IRA.

Precious metals are an investment and carry risk. Consumers should be alert to claims that customers can make a lot of money in these or any investment with little risk. As with any investment, you can lose money and past performance is not a guarantee of future performance results. Consumers should also obtain a clear understanding of the fees associated with any investment before agreeing to invest.

Key insights

  • Precious metals IRAs allow you to invest in gold, silver, platinum and palladium.
  • Only IRS-approved coins, rounds and bars can be purchased in a precious metals IRA.
  • Investing in a precious metals IRA saves on taxes, but you can’t store your own metals — they must be with an approved custodian.
  • Precious metals IRAs may come with high fees and setup costs.

What is a precious metals IRA?

A precious metals IRA is a type of self-directed individual retirement account (IRA) that allows you to invest in physical metals such as gold, silver, platinum and palladium. Standard IRAs don’t let you buy alternative assets such as precious metals, real estate or crypto, but you can invest in these assets within a self-directed IRA.

“Within an IRA, you can hold precious metals such as gold and silver bullion or indirectly through precious metal ETFs [exchange-traded funds],” said Nathan Mueller, financial planner and financial coach at BlackBird Finance in Pagosa Springs, Colorado. “You may additionally have precious metal coins that meet specific criteria.”

Precious metals IRAs enjoy the same tax advantages as standard IRAs but have a few extra rules for investing, such as that any physical metals you buy be stored with an approved custodian. This ensures your investments are insured in case of loss or theft. There are also specific requirements for the type of precious metals that you are allowed to invest in within your IRA.

» MORE: What is a gold IRA?

What precious metals can you invest in an IRA?

Self-directed IRA accounts let you buy precious metals, but there are some limitations to be aware of:

  • Only four different metals: You can only invest in gold, silver, platinum or palladium within an IRA. Other precious metals are not allowed.
  • Bullion only: Precious metals can be owned in a self-directed IRA in the form of coins, rounds or bars that meet certain requirements. You cannot own precious metals in the form of jewelry or with other gems or valuables attached.
  • Purity requirements: There are purity requirements for the precious metals within an IRA. Gold must be 99.5% pure, silver must be 99.9% pure, and both platinum and palladium must be 99.95% pure. The only exception to this rule is the American Gold Eagle coin.
  • Other requirements: Precious metals held in an IRA must be produced by an accredited manufacturer or be directly from a government mint. Coins and other forms must be in excellent condition, with most requiring proof of authenticity.

» MORE: Is gold a good investment?

Pros and cons of precious metals IRAs

Investing in precious metals within your retirement account offers a way to diversify your holdings into alternative assets. You can also buy and sell precious metals without a massive tax bill each year.

“It can act as a hedge against economic uncertainty and a hedge against inflation,” said Mueller. “Another pro is that taxes change when precious metals are held in an IRA compared to a non-retirement account. Precious metals will be taxed at a 28% capital gains rate, much higher than the 20% long-term capital gain rate that most Americans would pay on other investments.”

But there are also risks of investing in precious metals. Prices may not keep up with the stock market, and there is often more volatility than other investments.


  • Investment diversification
  • Save on taxes
  • Inflation protection
  • Own a physical asset in a retirement account


  • May have high fees
  • Metals can’t be accessed until age 59½ (without penalties)
  • Investment volatility
  • Limits on how much you can contribute

How to open a precious metals IRA

There are quite a few gold IRA providers online, but you’ll want to find one that also offers other precious metals. These IRA providers help you open a self-directed IRA account and walk you through setting up your account to purchase precious metals.

Precious metals IRA companies are licensed and work with an approved custodian to store your metals.

Once you’ve chosen a company, here’s what you’ll need to do to set everything up:

  1. Open your account. You’ll need to provide your personal and financial information, including your name, address, email and Social Security number. Some precious metals IRAs also require paying a one-time setup fee.
  2. Transfer funds. You can deposit cash (up to the annual IRA limits) or roll over funds from another IRA. If you choose to roll over, you’ll need to sell investments into cash first because your old investments can’t transfer to a precious metals IRA.
  3. Purchase precious metals. You can choose which precious metals to purchase within your account. You can purchase physical coins, rounds and bars, which will be securely stored with an approved custodian. You can withdraw them in retirement starting at age 59½.

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    How much should you invest in precious metals?

    Investing in alternative assets such as precious metals can help you build a diversified portfolio, but there are higher risks and more volatility with precious metals than most traditional investments. It is recommended to only invest a small portion of an overall portfolio into precious metals, depending on your risk tolerance, investing goals and time horizon.

    Which precious metal is the best to invest in?

    While there are many types of precious metals you can invest in, gold is by far the most popular. This is due to gold’s status as a timeless investment that has held value for over thousands of years and provided a hedge against inflation and volatile economic environments. Silver is the most affordable precious metal, and platinum and palladium have more industry use cases, but gold continues to outshine each of these as a long-term investment.

    Can you invest in cryptocurrency in an IRA?

    Yes, self-directed IRAs allow you to invest in cryptocurrencies as long as they are stored with an eligible custodian. In fact, there are Bitcoin IRAs that allow you to invest in many different cryptocurrencies, as well as some precious metals.

    Bottom line

    Investing in precious metals can offer diversification, but there is a hefty tax when selling them, as the IRS sees them as collectibles. Investing in a precious metals IRA can help you avoid those larger tax rates while owning a physical asset for retirement.

    Precious metals are more volatile than traditional investments and may not outperform the stock market, but they can be a great hedge in an inflationary environment. Just make sure to do your research before investing a large chunk of your portfolio into precious metals.

    Article sources

    ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:

    1. IRS, "Retirement Topics - Participant-Directed Accounts." Accessed Dec. 19, 2023.
    2. IRS, "Retirement Topics - Plan Assets." Accessed Dec. 19, 2023.
    3. STRATA Trust Company, "IRA Allowable Precious Metals." Accessed Dec. 19, 2023.
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