How to Invest in Precious Metals With a Self-Directed IRA

To invest in precious metals with a self-directed IRA, you open an account with a custodian that handles alternative assets, fund it through a transfer or rollover, buy bullion or coins that meet IRS eligibility rules, and have those metals shipped directly to an approved depository for storage in the custodian’s name. You never take physical possession while the metals are inside the IRA. For 2026, total IRA contributions across all your accounts are capped at $7,500, or $8,600 if you’re 50 or older, and those limits apply whether you hold metals, stocks, or anything else.1Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500

Pick a Custodian and Decide Traditional or Roth

Most banks and mainstream brokerages don’t offer self-directed IRAs that hold physical metals. You need a custodian that specializes in alternative assets. Federal law requires an IRA trustee to be a bank or another entity that has satisfied the IRS it will administer the account properly.2Office of the Law Revision Counsel. 26 USC 408 Individual Retirement Accounts In practice, these are trust companies or nonbank custodians approved by the IRS.

Before signing, ask for the complete fee schedule in writing. Self-directed custodians typically charge three layers: a one-time setup fee, an annual account maintenance fee, and annual storage costs at the depository. Storage commonly runs in the range of 0.5% to 1% of the metals’ value per year, though some depositories use flat rates. Some custodians also add transaction fees each time you buy or sell. Over a decade, these compound, so comparing total cost across two or three firms is worth the time.

Account structure is the next choice. A traditional self-directed IRA takes pre-tax contributions and reduces your taxable income now; distributions in retirement are taxed as ordinary income. A Roth takes after-tax money and pays out qualified distributions tax-free. Contribution limits are identical either way. One quirk worth knowing: metals held in a traditional IRA are always distributed at ordinary income rates, even though physical gold sold outside an IRA is taxed at the collectibles rate of up to 28%.

Opening the account is straightforward. You’ll supply a Social Security number, government-issued ID, and beneficiary designations. If you’re moving existing retirement money, have a recent statement from the current plan ready.

Fund the Account: Transfer or Rollover

A trustee-to-trustee transfer is the cleanest way to move money into a self-directed IRA. Your new custodian contacts the old institution and moves the funds directly. No check reaches you, no tax event occurs, and there’s no limit on how many transfers you can do in a year.3Internal Revenue Service. Publication 590-A (2025), Contributions to Individual Retirement Arrangements (IRAs) – Section: Trustee-to-Trustee Transfer

An indirect rollover is riskier. Your old custodian cuts you a check, and you have 60 days to deposit the full amount into the new IRA. Miss the deadline and the IRS treats the entire amount as a taxable distribution, potentially plus a 10% early withdrawal penalty if you’re under 59½.4Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions5Internal Revenue Service. Topic No. 557, Additional Tax on Early Distributions From Traditional and Roth IRAs There’s also a one-per-year limit: only one indirect IRA-to-IRA rollover in any 12-month period, aggregated across all your IRAs. Trustee-to-trustee transfers don’t count against that cap.

Buy Only Eligible Metals

The IRS treats physical metals as collectibles, and buying a collectible with IRA funds triggers an immediate taxable distribution equal to the purchase cost.6Office of the Law Revision Counsel. 26 USC 408 Individual Retirement Accounts – Section: Investment in Collectibles Treated as Distributions The exception is bullion meeting the minimum purity that a regulated futures exchange requires for physical delivery. In practice:

Certain government-issued coins qualify even when they fall below those thresholds. American Gold Eagles contain roughly 91.67% gold (alloyed with silver and copper for durability) and would otherwise fail the .995 standard, but federal law names them as an exception. American Silver Eagles, American Platinum Eagles at .9995 purity, and coins issued under the laws of any U.S. state also qualify.6Office of the Law Revision Counsel. 26 USC 408 Individual Retirement Accounts – Section: Investment in Collectibles Treated as Distributions

Popular coins that don’t qualify include South African Krugerrands (91.67% gold, not named in the statutory exception) and British Sovereigns, which fail on the same grounds. Pre-1933 U.S. gold coins, older circulated currency, and anything with numismatic or collector value above its metal content are also out. If a dealer or custodian pitches a coin that isn’t a qualifying U.S. Mint product and doesn’t clear the bullion purity floor, don’t use IRA money to buy it.

Storage: Why the Metals Can’t Come Home With You

The statute requires that qualifying bullion remain in the physical possession of the IRA trustee.6Office of the Law Revision Counsel. 26 USC 408 Individual Retirement Accounts – Section: Investment in Collectibles Treated as Distributions Custodians delegate that possession to approved depositories with the vault infrastructure and insurance to hold the assets on the trustee’s behalf. Metals kept in your home safe, a personal safety deposit box, or any location you control cause the IRS to treat the full value as a taxable distribution.

The Tax Court confirmed this in McNulty v. Commissioner. The account owner took possession of American Eagle coins and argued that an LLC structure made it permissible. The court held that personal control over IRA assets is “against the very nature of an IRA” and treated the coins’ full purchase cost as taxable distributions, adding accuracy-related penalties. The amounts at issue totaled over $400,000 across two tax years. Home storage schemes marketed by some companies are not worth the risk.

Segregated vs. Commingled Storage

Depositories usually offer two arrangements. Segregated storage keeps the exact bars or coins you purchased in a separately identified space. Commingled storage pools your metals with similar items from other investors, and you own a specific quantity of the pool. Segregated costs more, but many investors want the assurance that specific items are set aside. Either satisfies the IRS as long as the depository operates under the custodian’s authority.

Confirm that the depository carries all-risk insurance covering theft, loss, natural disasters, and damage, with coverage matching the full value of the stored assets. The depository should send periodic inventory reports to the custodian verifying that the metals are physically present.

How the Purchase Actually Works

Once the account is funded, buying follows a set sequence. You pick a precious metals dealer and tell your custodian which products you want. The custodian provides a Direction of Investment form where you specify exact quantities, product types, and the dealer’s information. After reviewing the form, the custodian wires funds from the IRA directly to the dealer, typically within one to three business days.

The dealer ships the metals directly to the depository, not to you, using insured and secured transport. On arrival, the depository inventories the shipment against the purchase order and confirms receipt to both the dealer and the custodian. You get a transaction confirmation showing what’s now in storage and the final cost.

The custodian holds legal title on behalf of the IRA; you’re the beneficial owner. Each year the custodian files Form 5498 with the IRS, reporting the fair market value of everything in the account.9Internal Revenue Service. Form 5498 – Section: Instructions for Participant Check those annual statements to make sure reported values and fee deductions look right.

Prohibited Transactions and Disqualified Persons

Beyond storage, watch out for prohibited transactions: dealings between the IRA and “disqualified persons” that the IRS treats as self-dealing. Disqualified persons include you, your spouse, your parents, your children, your grandchildren, and the spouses of your children and grandchildren.10Internal Revenue Service. Retirement Topics – Prohibited Transactions Anyone acting as a fiduciary or advisor to the IRA also counts.

Practically, you cannot sell gold coins from your personal collection to your IRA, buy metals from a family member’s business, or use IRA-held metals as collateral for a personal loan. The IRS has specifically flagged that purchasing a collectible with plan funds for the personal use of a disqualified person is a prohibited transaction.11Internal Revenue Service. Investments in Collectibles in Individually Directed Qualified Plan Accounts

Penalties are severe. A disqualified person who participates in a prohibited transaction owes an excise tax of 15% of the amount involved for each year the transaction stays uncorrected. If it isn’t corrected within the taxable period, that jumps to an additional 100% of the amount involved.12Internal Revenue Service. Retirement Topics – Tax on Prohibited Transactions Those come on top of any income tax and early distribution penalties if the IRS also treats the event as a deemed distribution.

Selling Metals and Taking Distributions

When you’re ready to access the value, you have two options: sell the metals inside the IRA for cash, or take a physical in-kind distribution of the bullion.

The more common route is selling back to a dealer. You direct the custodian to liquidate specific items, the dealer quotes a price, and cash settles back into the IRA. From there, the custodian distributes cash to you. A traditional IRA distribution is taxed as ordinary income; a qualified Roth distribution is tax-free.

With an in-kind distribution, the custodian ships the physical metals to you. Fair market value on the date of transfer counts as a taxable distribution from a traditional IRA, and your cost basis in the metals resets to that value, so any later sale is taxed only on appreciation above the new basis. Liquidation is slower than selling stock: between contacting the dealer, getting a quote, and settling, the process can run from a few days to a couple of weeks.

Required Minimum Distributions

If you hold metals in a traditional self-directed IRA, RMDs begin at age 73, rising to 75 in 2033.13Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs Because physical metals aren’t as liquid as a mutual fund, plan ahead. You can sell enough metal to cover the RMD in cash or take an in-kind distribution of metal equal to the required amount. Either way, the RMD is calculated on your total account balance as of December 31 of the prior year, divided by the life expectancy factor for your age from IRS tables.

Timing matters. Metal sales take longer to settle, and if prices drop while you’re arranging the liquidation, you could fall short. Missing an RMD triggers a 25% excise tax on the shortfall. Start the process early in the year rather than scrambling in December.