Legality of Holding Gold in a SDIRA

Diversifying investments is essential to managing risks and potentially increasing returns as an investor. You might have wondered, "Can I hold gold in an Individual Retirement Account"; this article seeks to answer this question while walking you through the steps involved with adding it into your retirement savings portfolio.

What Is a Self-Directed IRA?

Before delving deeper into holding gold in an IRA, let's define exactly what a self-directed IRA entails. While traditional IRAs generally allow investments only into stocks, bonds, and mutual funds; with a self-directed IRA you have greater freedom in diversifying investments across real estate, private equity funds, precious metals such as gold.

Gold has long been considered an indisputable investment asset, providing protection against inflation and economic instability. When stocks experience fluctuations or volatility, its value tends to hold steady or even increase; including gold in an IRA can diversify an investor portfolio against potential downturns in the market and help provide some degree of financial protection against unexpected surprises.

Legality of Holding Gold in an IRA

Yes, gold may legally be included as an investment within your self-directed IRA. The Taxpayer Relief Act of 1997 expanded the type of precious metal investments allowed within an IRA account; gold being one of them. However, due to IRS restrictions regarding purity and type, they set certain standards as to what can and cannot be included within such accounts.

IRS Guidelines

According to IRS rules, gold held within an Individual Retirement Account must meet 99.5% purity requirements to qualify as eligible assets in an IRA. Examples of acceptable forms include American Gold Eagle coins and Canadian Maple Leaf coins as well as gold bullion bars that meet purity requirements; collectible coins or jewelry are ineligible for inclusion.

Steps for Incorporating Gold into an Individual Retirement Account

  • To incorporate gold into an IRA account, first open one with an institution that accepts investments of this nature (i.e., a custodian that supports investment of precious metals into self-directed IRA accounts).

  • Fund the IRA Account: Move funds from an existing IRA into the self-directed IRA account or contribute up to IRS limits, depending on which option best meets your needs.

  • Select Gold Products: When adding gold products to your IRA, be sure that they meet IRS purity requirements.

  • Storage Options for Gold: According to IRS regulations, any physical gold must be stored at an approved depository. Your custodian can guide you in organizing proper storage options that comply with IRS rules.

Risks and Considerations

While investing in gold may provide diversification benefits for your portfolio, it does not yield dividends or interest payments and its price can fluctuate quickly in the short term. Furthermore, storage fees as well as costs associated with buying and selling it must also be factored into consideration.


Gold in a self-directed IRA can provide an effective means of diversifying your portfolio and protecting it against economic instability, provided you follow IRS regulations as well as being mindful of any associated risks or costs. Consulting a financial advisor who specializes in precious metals or self-directed IRAs could prove especially helpful when making informed investment decisions.