With a traditional IRA or other retirement account, you can invest in gold through the stock market by buying stocks in mining companies or mutual funds that hold those stocks. Another alternative is a gold ETF, an exchange-traded fund that tracks the performance of gold as an asset. Gold IRAs are aimed at investors who want to diversify their assets while saving for retirement. Precious metals such as silver and gold, platinum and palladium are regarded as hedges against inflation and stock market volatility. Gold IRAs allow you to hold these precious metals in an individual retirement account.
The accounts offer the same tax benefits as IRAs, which are invested in stocks, bonds, mutual funds, and ETFs. A gold IRA is a type of self-managed individual retirement account (IRA) that allows you to own gold bars. In a regular IRA, you can’t own physical gold, although you can invest in a wide variety of assets that are invested in gold, such as stocks of gold mining companies or exchange-traded gold funds (ETFs). Gold IRAs are a special type of self-directed IRA that allows you to invest in physical gold and other precious metals, such as silver, platinum, and palladium.
Investing in a gold IRA requires the services of a custodian bank, a broker to purchase gold, and an approved depositary to store gold. Like other self-directed IRAs, Gold IRAs can be Traditional or Roth. The rules for withdrawals (selling the gold for cash) depend on whether the gold IRA is a traditional or a Roth IRA. Make sure you check the list of approved gold objects with your custodian manager before you deposit gold into your IRA.
Some people prefer the idea of holding physical gold rather than getting exposure to precious metals by buying stocks in gold mining companies or gold-based ETFs. It uses STRATA Trust Company and Equity Trust Company as custodian managers for gold IRA accounts as well as the Brinks Depository and Delaware Depository vaults. Gold IRA companies are essentially brokers that sell IRS-approved coins and bars of gold and other precious metals so you can invest a gold IRA. You then have to buy the approved gold or other precious metal and have it transferred to the custodian so that the custodian bank can book it, explains Moy.
Therefore, the first step to operating a Gold IRA is to search for a custodian or trustee that offers Gold IRAs. A gold IRA is a self-directed IRA that allows investors to receive tax benefits while investing in physical gold and other precious metals. Your Gold IRA provider can help you determine which coins, bars, and other gold bars meet the requirements for storage in a Gold IRA. Your custodian bank can refer you to an approved institution and process the gold transfer as part of setting up your Gold IRA.
Most gold IRA companies buy back gold or other precious metals they’ve sold you, but buybacks are generally made at the wholesale price, which is around a third cheaper than the retail price. A gold IRA is characterized by the fact that the account holder owns the actual precious metals, as opposed to stocks or fund shares in mining companies. Some gold IRA companies describe their offerings as diverse because you can hold more than one type of precious metal in them.