Can an IRA Hold Gold ETFs?

People have historically invested in physical gold as a store of value and protection against inflation. Unfortunately, buying and storing physical gold can be both costly and inconvenient.

Today’s investors can bypass the hassle and expense of owning physical gold by investing in an exchange-traded fund (ETF). These investment vehicles are compatible with both traditional and Roth IRAs for easy diversification.


ETFs offer a convenient and economical way for investors to gain exposure to gold without incurring the logistical expenses associated with owning physical bullion. While buying and storing physical gold requires finding a reputable gold dealer, paying storage fees, and insuring it – expenses which quickly add up over time. Physical gold-backed ETFs remove this hassle by offering investors fractional ownership in gold that’s tracked daily and reflected back through shares held within the fund.

Investors should also be mindful of the tax ramifications of investing in gold ETFs. Commodity-based ETFs that invest in futures contracts require annual accounting of gains and losses with 60% long-term gains (held over one year) and 40% short-term gains; this creates an advantageous rate when compared to high short-term capital gains taxes on other investments such as individual stocks.

Gold ETFs may also be more tax-efficient than traditional mutual funds due to their lower capital gains generated. By tracking commodities indices instead, these ETFs generate lower capital gains tax burdens that might otherwise incur short-term taxes.


Gold is not liquid and requires storage and may be costly to transport, making IRA holders who wish to sell physical gold an arduous task – particularly during periods of increased market instability. As an alternative, many investors opt for ETF investments instead.

Gold Exchange Traded Funds (ETFs) offer investors an easy, convenient, and transparent investment option on the open market. Furthermore, their prices of the gold they hold are determined using widely recognized indices and standard pricing systems. Furthermore, unlike physical gold bullion which is subject to the top 28% capital gains rate for collectibles tax, ETFs that don’t invest directly in this metal don’t fall under its purview and don’t fall within this tax threshold.

Due to these reasons, it may be simpler for an IRA to own gold ETFs than physical bullion. However, diversifying your portfolio with stocks and bonds may reduce risks related to market fluctuations as well as inflation losses.


Gold has long been considered an investment safe-haven, particularly during times of geopolitical unease and political divisions. Furthermore, physical gold investments should be treated like any other asset class and it’s wise to avoid high-pressure sales tactics or unqualified recommendations in order to secure their success and decrease risks in a portfolio. However, not all physical gold investments are equal; make sure your purchase complies with regulations before investing your hard-earned dollars in physical gold investments.

An investment in a Gold ETF within an IRA provides tax-deferred benefits, delaying payment until retirement when withdrawals may have a lower tax rate. Unfortunately, investing in physical gold can be expensive and inconvenient.

Physical gold requires fees for storage, insurance and maintenance that make it more expensive than an ETF, which only incur brokerage, management and trading charges.

Investors selling shares in a Gold ETF generally pay taxes at regular capital gains rates; those owning physical precious metal-holding ETFs may incur additional taxes, such as Medicare surtax on net investment income for high-income investors. If an ETF is structured as a grantor trust however, tax rules vary and gains from selling these shares typically fall under ordinary income tax brackets.

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