Can I Own a Gold ETF in My IRA?

Can I own a gold ETF in my IRA

While owning precious metals in an IRA is legal, it may not always be the most efficient way to gain exposure. Instead, consider exchange-traded funds or mutual funds that track gold prices and indexes as another viable route to increasing exposure.

Investing in physical gold can be expensive and time consuming. Furthermore, its storage may prove inconvenient and cumbersome.


Gold has long been revered as a safe-haven asset and recognized for its long-term value. Investors who wish to invest in physical gold may wish to consider buying it through an IRA or ETFs as both have tax advantages.

Traditional IRAs do not permit purchases or storage of physical precious metal coins or bullion; however, this restriction was lifted when the IRS determined that an IRA’s purchase of shares in a precious metal ETF did not count as collecting an item under IRS regulations. There may still be limits placed upon how much physical precious metal an IRA can store physically.

Gold ETFs are professionally managed funds that track the performance of precious metals like gold. Like any investment vehicle, these ETFs incur fees and expenses that need to be considered, such as purchasing/selling costs of their underlying gold, management fees and transaction costs which will affect any potential gains when sold off later on.


While ETFs don’t produce income like physical gold does, that doesn’t mean they don’t incur expenses. Management fees and operating costs must still be covered; when gold prices drop this can eat into profits and therefore investors should carefully assess whether owning such precious metal-based investments such as GLD outweigh its associated costs.

Physical gold investing requires you to pay both for its numismatic value and storage fees; those factors could reduce your annualized after-tax return by more than two percentage points, as shown below.

Notably, IRAs cannot hold physical gold; you will need a self-directed account with a custodian and dealer who specialize in precious metals IRAs in order to do so. This process may be costly and time consuming; therefore it would be prudent to discuss all available options with an accountant first before making a final decision.


An exchange-traded fund (ETF) could be an efficient and economical way to invest in precious metals. While investing directly can be more convenient and costly, the IRS taxes gains from collectible investments when sold – potentially increasing your tax rates when selling.

However, investments made within an IRA in gold ETFs do not need to be sold at market prices and remain tax exempt until withdrawals from the account take place; at that point, any gains are subject to taxes at either the individual’s ordinary income tax rate or 28%, whichever is lower.

Gold ETFs also do not experience counterparty risk. This fear, which stems from previous bank collapses and financial disasters, does not apply to these funds because their assets are held in a trust managed by professionals that holds physical gold stored in depository complying with IRS standards for IRAs. Furthermore, these ETFs can be liquidated at any time the exchange opens unlike physical bullion or coins which must remain at physical locations until exchange opening time has come around again.


ETFs differ from physical gold in that they’re intangible and therefore vulnerable to theft or damage, yet still present an excellent option for investors looking to diversify their retirement savings portfolio with gold. By investing 10-15% of assets into gold and related instruments, investors can provide themselves an inflationary hedge while still having access to their investment portfolio while saving for retirement.

If you make a profit on a gold ETF, capital gains taxes must be paid according to its nature as any stock or mutual fund investment. Your rate of tax depends on both income and whether or not the profit was short-term or long-term in nature.

Roth IRA accounts can help investors avoid capital gains taxes when withdrawing the money after age 59 1/2, but bear in mind that gold ETFs do not produce dividends or interest payments, making them unsuitable as income-generating investments.

Raymond Banks Administrator
Raymond Banks is a published author in the commodity world. He has written extensively about gold and silver investments, and his work has been featured in some of the most respected financial journals in the industry. Raymond\\\'s expertise in the commodities market is highly sought-after, and he regularly delivers presentations on behalf of various investment firms. He is also a regular guest on financial news programmes, where he offers his expert insights into the latest commodity trends.

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