Can an IRA Hold Gold ETFs?

Can an IRA hold gold ETFs

Answering this question depends on various considerations; investors must do extensive research into gold ETFs prior to investing.

IRAs are popular investments for retirement savings. Investors can save with tax relief while accruing substantial tax advantages.

An Individual Retirement Account, or IRA, can hold many assets, such as physical gold and precious metals. While they’re prohibited from holding collectibles, certain gold ETFs are allowed.


As with any investment, tax issues may become an issue. While the IRS prohibits IRAs from investing in collectibles, gold ETFs have not been considered suitable (Letter Ruling 200732026).

Gold ETFs differ from physical gold in that they’re less tangible; rather, they use derivatives and futures contracts to track its price. Because this happens, you will owe capital gains taxes when selling shares.

An ETF focused on precious metals may serve as a good safe haven asset during times of economic distress; however, investing exclusively in gold may not provide sufficient diversification needed in retirement accounts. To achieve optimal diversification for retirement accounts, no more than 10% of your portfolio should consist of precious metal investments.

Another option for an IRA to own gold is by investing in common stock shares of mining companies that produce the metal. Before doing this, however, be sure to review the tax section of an ETF’s prospectus which should usually be available online.


Before investing in precious metals, it’s essential that you set financial goals and understand the associated risks. Prices for precious metals can fluctuate and so too may the value of your investment fluctuate over time; furthermore, non-diversified precious metals investments can expose investors to significant speculative risk.

Gold ETFs offer an efficient and safe method for investing in gold without owning it physically. These funds track its price, can easily be traded on stock exchanges, and do not incur entry or exit loads or incur securities transaction taxes or value added taxes, making them an cost-effective investment solution.

However, owning physical precious metals can be expensive and difficult to store and insure. Furthermore, investing all your retirement savings in precious metals would expose your portfolio to too much risk; there are alternative strategies available to you for getting exposure to precious metals in retirement accounts.


Investment of physical gold requires finding an approved depository to store it, in addition to paying shipping, insurance and storage fees. Gold IRAs tend to incur more costs than traditional IRAs due to higher maintenance expenses.

Gold ETFs may be less expensive than investing in physical gold bullion, but they come with their own set of drawbacks. Notably, they don’t produce income and must sell assets to cover management fees and expenses – which reduces asset per share values and potentially impair performance.

If you want to diversify your retirement portfolio with gold, consider the SPDR Gold Trust. Similar to its larger rival, iShares Gold Trust, but with lower expense ratios and greater liquidity. Leveraged gold ETFs should also be avoided since they use financial derivatives for betting on future prices; such investments don’t fit with buy-and-hold strategies commonly preferred among investors saving for retirement.


Gold ETFs provide an indirect method of investing, since they do not represent physical assets like coins and bars directly. However, they offer several advantages, including convenience and low fees. Investors with IRAs should conduct due diligence before investing and speak to both their financial advisor or CPA about how these investments could impact their tax situation.

IRS rules typically prohibit Individual Retirement Accounts (IRAs) from owning collectibles, with one exception for gold investments: exchange-traded funds that hold gold such as SPDR Gold Trust may allow IRA holders to purchase shares. They may also purchase stocks of gold mining companies.

Some investors prefer owning physical precious metals that they can keep in a safety deposit box or home safe, which may act as an invaluable buffer during periods of market instability and protect retirement savings from policy mistakes from central banks. Unfortunately, this form of investment typically requires larger allocations than what many financial advisors recommend – typically between 0.5% to 2% in most cases.

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