How to Set Up a Precious Metals IRA: Custodians, Metals, and Storage

To set up a precious metals IRA, you open a self-directed IRA with a qualified custodian, fund it through a contribution or a transfer from an existing retirement account, and then direct the custodian to buy IRS-eligible bullion that gets shipped to an approved depository for storage. The steps mirror any other self-directed IRA, but the metals have to meet strict purity standards and cannot be kept at home. Contribution limits for 2026 are the same as any IRA: $7,500 per year, or $8,600 if you’re 50 or older.¹ Get any piece of this wrong and the IRS can treat the whole account as distributed, with income tax on the full balance and a 10% early withdrawal penalty on top.

Decide Between Traditional and Roth First

The account type has to be settled before you fill out any paperwork, because the tax treatment is fundamentally different. A Traditional self-directed IRA gives you a potential deduction on contributions now, and every dollar you withdraw in retirement is taxed as ordinary income.² A Roth works the opposite way: you contribute after-tax dollars, get no deduction, and qualified withdrawals come out tax-free.

Roth contributions phase out at higher incomes. For 2026, single filers begin losing eligibility at $153,000 of modified adjusted gross income and are fully phased out at $168,000. Married couples filing jointly phase out between $242,000 and $252,000.³ Traditional IRAs have no income cap on contributions, though the deductibility phases out if you or your spouse are covered by a workplace plan.

Choose a Qualified Custodian

Federal law requires IRA assets to be held by a bank, credit union, or another entity approved by the IRS to administer the trust.⁴ You cannot serve as your own custodian. In the precious metals space, most custodians are specialized trust companies rather than large banks. They handle paperwork, tax reporting, and coordination with dealers and depositories, but they do not give investment advice.

Expect three separate fees: a one-time setup charge, an annual account maintenance fee, and storage fees passed through from the depository. Combined, they typically run a few hundred dollars a year for a modest account and scale up for larger holdings. Compare fee schedules from at least three custodians before signing anything, and watch for transaction fees charged every time you buy or sell metals within the account.

Open and Fund the Account

The Application

The application asks you to specify the account type (Traditional or Roth) and how you plan to fund it: a new annual contribution, a rollover from an employer plan like a 401(k) or 403(b), or a transfer from an existing IRA. Identifying the funding source correctly matters because the custodian reports contributions, rollovers, and the account’s fair market value to the IRS on Form 5498.⁵ Mislabeling a rollover as a contribution can make it look like you exceeded the annual limit.

You’ll need a government-issued photo ID to satisfy federal anti-money laundering rules.⁶ The form also asks for beneficiary names, dates of birth, and Social Security numbers. If you’re funding from an existing retirement account, keep a recent statement on hand for the account number and institution name.

Transfers Versus Rollovers

A direct transfer (trustee-to-trustee) is the cleanest way to move money in. Your current custodian sends the funds straight to the new one. No tax withholding, no deadline, and no limit on how many direct transfers you can do per year.⁷

An indirect rollover is riskier. The old custodian sends you a check, and you have 60 days to deposit the full amount into the new account. Miss the window and the IRS treats the entire sum as a taxable distribution, potentially with the 10% early withdrawal penalty on top.⁷ Two additional traps make indirect rollovers especially dangerous:

You can only do one indirect IRA-to-IRA rollover in any 12-month period across all your IRAs combined. A second one within that window becomes a taxable distribution. Direct transfers are exempt from this limit.
If you’re rolling from a 401(k) or similar employer plan and the check is payable to you, the plan must withhold 20% for federal taxes. To complete the rollover, you have to make up that 20% from other funds and deposit the full original amount within 60 days.

For most people, the direct transfer removes the deadline, the withholding problem, and the one-per-year rule in a single move.

Buy Metals That Meet IRS Purity Standards

Federal law treats most metals and coins as collectibles, which are banned from IRAs. The exception in 26 U.S.C. § 408(m)(3) allows bullion that meets the minimum fineness a regulated futures contract market requires for physical delivery.⁴ In practice:

Gold must be at least.995 fine, per COMEX delivery standards.⁸
Silver must meet .999 fineness.
Platinum and palladium each require .9995.
Bars or rounds must come from a refinery or national mint recognized by the contract market.

Certain U.S. government coins get a statutory pass. American Eagle gold coins qualify even though they’re only 91.67% gold, well below the .995 bar for bars. The statute lists them by reference to 31 U.S.C. § 5112, alongside American Eagle silver and platinum coins and coins issued under any state’s laws.⁴ Canadian Maple Leafs and Australian Kangaroos generally qualify because they meet or exceed the fineness thresholds. South African Krugerrands are 91.67% gold with no statutory exemption, so they do not qualify.

Buying an ineligible item with IRA funds is treated as a cash withdrawal equal to the purchase price. That “deemed distribution” hits you with ordinary income tax plus the 10% penalty if you’re under 59½.⁹

The Dealer Markup Question

The dealer is the company that actually sells you the metal. Your custodian may have a preferred dealer list, but you’re generally free to choose any reputable dealer that can ship to an approved depository. Dealers sell above spot and buy back below it, and that spread is where most precious metals IRA investors quietly lose money.

For standard bullion bars and coins, spreads typically run about 1% to 10% above spot. Numismatic coins can carry markups around 30%, and some semi-numismatic products have been sold at 25% to over 100% above melt value.¹⁰ Before you place any order, ask the dealer what they’d pay to buy the same item back tomorrow. A 30% gap between the buy price and sell price means the metal has to appreciate 30% just for you to break even. This is the single most important question to ask before funding a purchase.

Store the Metals at an Approved Depository

Once the account is funded with cash, you direct the custodian to buy from your chosen dealer. The custodian wires payment, the dealer ships via insured transport to an IRS-approved depository, and the depository verifies and logs the shipment. Your account records are updated to reflect the physical assets in storage.

You cannot keep IRA metals at home, in a personal safe, or in a safe deposit box you control. The IRS requires the bullion to remain in the physical possession of a bank or approved nonbank trustee. Taking personal possession is a distribution, with the income tax and potential 10% penalty that comes with one.¹¹ This rule also applies to indirect workarounds like having an IRA-owned LLC purchase bullion and store it at your house. The IRS has flagged that arrangement as noncompliant.

Depository fees are charged annually, either as a flat fee or as a percentage of account value, and insurance is normally included. When comparing depositories, confirm whether your metals are stored on a segregated basis (your specific coins and bars kept separate) or commingled with other investors’ holdings. Segregated storage costs more, but you’ll get back the exact items you purchased when you take a distribution.

Prohibited Transactions That Can Wipe Out the Account

The IRS bars a long list of transactions between your IRA and “disqualified persons,” a group that includes you, your spouse, your parents, your children and their spouses, the IRA’s fiduciary, and anyone providing services to the account.¹² Prohibited actions include selling property to the IRA, borrowing from it, using its assets as loan collateral, and receiving any personal benefit from its holdings.¹³

The consequence for an IRA is uniquely severe. Unlike employer plans, where a prohibited transaction triggers an excise tax, an IRA that engages in one loses its tax-exempt status entirely as of January 1 of that year. The whole balance is treated as distributed to you on that date, with income tax on the full fair market value plus the 10% penalty if you’re under 59½.⁴ A $200,000 account can generate $50,000 or more in taxes and penalties overnight, and the whole IRA is gone, not just the portion involved in the transaction.

The most common ways precious metals IRA holders stumble in: storing metals at home, using an LLC structure to take indirect possession, buying metals from a family member, or selling personal coins into their own IRA. These are not gray areas.

Getting Money Out Later

Traditional precious metals IRAs follow the same required minimum distribution rules as any Traditional IRA. You must begin taking withdrawals by April 1 of the year after you turn 73.¹⁴ After that first year, each annual RMD is due by December 31. Missing one triggers a 25% excise tax on the shortfall, dropping to 10% if you correct it within two years.¹⁵ Roth IRAs have no RMDs during the original owner’s lifetime.

When it’s time to take a distribution, you can sell metals inside the account and withdraw cash, or take an in-kind distribution and receive the physical metals. Either way, the fair market value on the distribution date counts as taxable income for Traditional accounts. In-kind doesn’t dodge the tax; it just means you end up holding gold or silver instead of cash.

Liquidating isn’t as fast as selling stocks. You direct the custodian to sell, the custodian coordinates with a dealer, the depository ships the metals, and cash comes back to the account. The whole process generally takes about a week and can run longer. If you’re liquidating to meet an RMD deadline or fund an emergency, build in extra time. And remember the spread cuts both ways: the dealer’s buyback price will sit below spot, just as your purchase price sat above it. A metal that appreciates 5% in spot price over several years can still leave you at a net loss once purchase markup, buyback discount, and years of custody and storage fees are counted.¹⁰

1
Internal Revenue Service. Retirement Topics – IRA Contribution Limits
2
Internal Revenue Service. Publication 590-B (2025) – Distributions From Individual Retirement Arrangements (IRAs)
3
Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500
4
Office of the Law Revision Counsel. 26 USC 408 – Individual Retirement Accounts
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Internal Revenue Service. Form 5498 – IRA Contribution Information
6
FFIEC. Assessing Compliance With BSA Regulatory Requirements – Customer Identification Program
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Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions
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CME Group. Chapter 126 – Gold (Enhanced Delivery) Futures
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Internal Revenue Service. Investments in Collectibles in Individually Directed Qualified Plan Accounts
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FINRA. Investor Bulletin – 10 Things to Ask Before Buying Physical Gold, Silver or Other Metals
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Internal Revenue Service. Retirement Plans FAQs Regarding IRAs
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Internal Revenue Service. Retirement Topics – Prohibited Transactions
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Office of the Law Revision Counsel. 26 USC 4975 – Tax on Prohibited Transactions
14
Internal Revenue Service. Retirement Topics – Required Minimum Distributions (RMDs)
15
Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs