How Holding Physical Gold in an IRA Works
Holding physical gold in an IRA works in a fixed sequence: you open a self-directed account with a custodian, move money into it by transfer, rollover, or contribution, direct the custodian to buy specific metal from a dealer, and the dealer ships that metal to an approved depository. From then on the custodian reports the holdings on statements and to the IRS, and eventually you either sell the metal inside the account or take it out as a distribution.
This page follows the money and the metal through each stage. For the definition and the pros and cons, start with what a gold IRA is.
Stage 1: Opening the Self-Directed Account
A conventional brokerage IRA cannot hold a 1-ounce coin sitting in a vault. You need a custodian that administers alternative assets, which is what "self-directed" means in practice. The application usually asks for identification, beneficiary designations, the account type (traditional, Roth, SEP, or SIMPLE), and a fee payment method. The precious metals company you buy from often provides the custodian's forms and helps fill them in, but the account agreement is between you and the custodian.
At this stage you also typically choose a depository and a storage type. Our page on self-directed IRA basics covers what the custodian is and is not responsible for.
Stage 2: Moving Money In
A new account starts empty. Funding generally comes from one of three places:
- Trustee-to-trustee transfer from another IRA. The old custodian sends funds directly to the new one. Transfers are not reportable distributions and are not limited in number.
- Rollover from an employer plan or IRA. A direct rollover avoids withholding. If a distribution from an employer plan is paid to you instead, the plan must withhold 20%, and you have 60 days to deposit the full amount to avoid tax on the shortfall.
- Annual contributions, subject to the IRS limit for the year, which the IRS posts on its contribution limits page.
The new custodian usually initiates the request with the old provider. Delays most often come from the old provider requiring its own forms, a medallion signature stamp, or a mailed check. The trustee-to-trustee transfer guide explains why that route is often the cleanest.
Stage 3: Choosing and Buying the Metal
Once cash settles in the account, you decide what to buy. The custodian does not pick products or give recommendations; it only executes what you direct. You agree on products and prices with the dealer, then sign a purchase direction or buy authorization that tells the custodian to pay the dealer from your account.
Points to check before you sign:
- Every product must be IRA eligible. See which gold coins are IRA eligible.
- The price per coin or bar, and how far it sits above the spot price.
- Whether the price is locked at the time of the call or when funds arrive.
- Whether the company's written buyback terms apply to the products you are choosing.
Stage 4: Shipping to the Depository
The dealer ships the metal, insured, directly to the depository named on your account. You do not receive it. The depository counts and inspects the shipment, records it against your account, and confirms receipt to the custodian. If you chose segregated storage, your specific items are set aside under your name; with non-segregated storage, your holdings are recorded by type and quantity and pooled with identical products. See segregated vs non-segregated storage for the trade-offs.
Stage 5: Statements and IRS Reporting
Once the metal is recorded, your custodian lists it on periodic statements. Values are usually based on a market price for each product, and they may differ from what a dealer would pay you on a given day. Each year the custodian files Form 5498, which reports contributions, rollovers, and the account's fair market value at year end. You do not file it; the IRS describes it on its About Form 5498 page.
Annual custodian and storage fees are billed during this stage, either charged to the account's cash or paid by you separately. Keeping a small cash balance in the account, or paying fees by card, avoids having to sell metal to cover them.
Stage 6: Selling, Swapping, or Taking Distributions
The account can keep holding metal for as long as the rules allow. When something needs to change, there are three main paths:
- Sell inside the account. You direct the custodian to sell to a dealer. The proceeds stay in the IRA as cash with no tax due at that point.
- Exchange products. Selling one product and buying another inside the account is generally possible, though spreads apply on both sides.
- Take a distribution. You can receive cash after a sale, or take the metal itself as an in-kind distribution shipped to you. Either way, the custodian issues Form 1099-R, and the value is generally taxable income from a traditional account.
Distributions taken before the IRS-defined age may also face a 10% additional tax unless an exception applies, as explained on the IRS page on early distributions. Once required by IRS rules, traditional accounts must also make minimum distributions each year, which may mean selling metal or shipping some out. A tax professional can help you plan the timing.
Where a Precious Metals Company Fits
Many people go through a full-service precious metals company that coordinates the whole sequence: providing custodian paperwork, tracking the transfer, quoting prices, and arranging shipment. Goldco, for example, describes a process in which its precious metals specialists help customers open a self-directed account with a custodian, fund it by transfer or rollover, choose metals, and have them delivered to an independent insured depository. Its specialists are not licensed to give financial, legal, or tax advice. You can see how that process is laid out in how Goldco works, step by step.
Frequently Asked Questions
How long does the whole process take?
Timing depends mostly on how fast the old provider releases funds. Transfers from cooperative IRA custodians can be quick, while employer plans sometimes require extra steps. The dealer and depository steps usually add days, not weeks.
Can I visit or see my gold?
Some depositories allow scheduled visits; others do not. Your statements and the depository's confirmation are the normal record. Ask before choosing a storage location.
Who pays the storage and custodian fees?
You do, either from cash in the account or from personal funds, depending on the custodian's policy and what you choose.
What happens to the metal if I die?
The account passes to the beneficiaries you named, under the IRS beneficiary rules. They can generally sell the metal or take it in kind, subject to those rules.