Can I Buy GLD in My IRA?
Retail GLD stock shares do not grant ownership of physical gold bullion; rather, the GLD prospectus states that retail shareholders remain unsecured creditors of the fund.
Still, many investors are attracted to precious metals as an effective hedge against an economic slowdown and recession, such as GLD or other ETFs. GLD offers investors a simple solution for doing this.
What is GLD?
GLD is the world’s largest physically backed gold exchange-traded fund and offers investors exposure to gold without incurring storage costs or logistical difficulties. Many investors mistakenly assume owning shares of GLD entitle them to actual physical metal; however, many don’t realize this fact. Suzanne Hutchins of Newton (part of BNY Mellon), advised Forbes that her team holds gold as an inflation hedge against currency debasement; therefore GLD allows them to do this easily and cost-efficiently.
GLD is sponsored and managed by the World Gold Council and State Street. This trust holds gold bars in exchange for deposits made to it; authorized participants receive shares issued in minimum blocks of 100,000 each business day as an exchange trader trades back and forth between allocated and unallocated accounts each business day. Bank of New York Mellon serves as its trustee; they claim they reserve the right to inspect any subcustodian’s facilities, procedures, or records at any time.
How does GLD work?
GLD is a gold-backed ETF that operates like any other stock on Wall Street; its shares can be traded up and down with fluctuations in its physical holdings at HSBC’s vault in London, each share representing ownership of 1/10th of an ounce of physical gold; issued shares come in minimum blocks of 100,000; moving into or out of an allocated account, segregated from other gold held by HSBC, occurs throughout a business day with shares transferred later into unallocated accounts of authorized participants – usually brokerage firms.
IRS has recently issued a ruling that IRAs can legally own precious metal coins and bullion through a special tax-code exception, although this doesn’t mean a person could purchase physical coins from dealers and store them at home or safe deposit boxes, as that would violate IRA regulations. Instead, an IRA could invest in shares of gold-based ETFs like GLD or mining companies which manufacture precious metals directly.
How can I buy GLD in my IRA?
Physical gold bullion and coins for your IRA isn’t recommended as a cost-efficient investment solution; an ETF offers more efficient buying, storage and insuring capabilities compared with you or an IRA custodian. Furthermore, keeping precious metals exclusively within an IRA doesn’t help build a diversified retirement portfolio–it is too concentrated on one asset class.
However, self-directed IRAs (whether traditional, Roth, SEP, SIMPLE or solo 401(k)s) allow investors to directly purchase precious metals like GLD without going through intermediary accounts such as brokerage firms. Monex offers the industry’s best price for IRA eligible gold bullion and can assist you in selecting appropriate coins or bars that may diversify your portfolio. Request your quote now – our account managers are standing by at any time should any questions arise during this process! You can always call us if necessary or just pick up the phone any time!
Are there any fees associated with buying GLD in my IRA?
GLD is one of the world’s most beloved exchange traded funds, as it provides investors with physical exposure to gold. Gold’s popularity has skyrocketed as many fear the collapse of the dollar and inflationary pressures.
GLD investment provides more convenience than physical bullion because investors can simply buy and sell shares of the ETF rather than having to negotiate futures contracts. However, there may be fees associated with GLD which investors should be mindful of.
Retail GLD shareholders remain unsecured creditors of the trust, meaning that should it become mismanaged or bankruptcy occurs, they would likely not receive compensation for any of their losses.
Investors looking to purchase precious metals via an IRA should make sure their company does not charge transaction or account valuation fees, which could eat into potential profits. IRA Financial is one such provider who does not levy such charges and makes for an excellent option when looking to add GLD into an IRA account.