Get in the Game with a Gold IRA
Reid Sletten- Gold is a popular precious metal that has been prized for thousands of years.
- Gold is valued for its scarcity, durability, and malleability.
- It's found naturally in rocks.
- Gold is also widely used for jewelry, coins, and electronics. Gold is an excellent hedge against inflation and deflation.
- This versatile metal can be melted and cast into different shapes.
- Gold is malleable, which means that it can be flattened and pressed into different shapes, such as flat sheets or wire.
Gold is a popular precious metal that has been prized for thousands of years. Gold is valued for its scarcity, durability, and malleability. It's found naturally in rocks. Gold is also widely used for jewelry, coins, and electronics.
Gold is an excellent hedge against inflation and deflation. This versatile metal can be melted and cast into different shapes. Gold is malleable, which means that it can be flattened and pressed into different shapes, such as flat sheets or wire.
Why Invest in Gold?
Gold has been a popular investment for decades, but it is only recently that people have started to think about investing in gold directly rather than indirectly through stocks and bonds. The reasons why people invest in gold include the following:
Gold is divisible into fractional units.
Gold is not affected by currency devaluation.
Gold has good liquidity.
Gold maintains value better than many other assets.
Gold works well in dollar-cost averaging.
Gold tends to rise when equities are falling.
With most investment options, investors have to consider a number of downsides, but investing in gold comes with no downside.
Gold has outperformed nearly all other investment classes over the past 20 years, and it tends to rise when equities fall. Gold's value is determined by macroeconomic factors, and its value fluctuates more when other investment options are in flux.
Types of Gold IRA Investments
Gold IRAs hold physical gold bars, coins, and certificates.
Other types of gold IRAs include:
Gold ETFs
Gold futures
Gold savings-backed notes
Gold IRAs must consist of either physical gold or the gold-equivalent of a physical gold IRA investment.
In-House Gold
Many IRA custodians offer "In-House" gold in the form of ETFs. These ETFs invest in the inventory of gold held by large exchanges like COMEX.
Advantages:
Low cost: ETFs are traded on major exchanges and typically have low expense ratios.
Low trading fees: Many ETFs have lower trading fees than physical gold.
Diversification: Gold ETFs offer exposure to gold bullion, as opposed to gold bars or coins.
Disadvantages:
Price fluctuation: The price of physical gold can fluctuate much more than the price of ETFs.
Storage: ETFs must be stored by a custodian, which can be both costly and inconvenient.
Physical Gold
Like any other retirement account, gold IRAs hold gold within their designated holdings. However, gold IRAs hold physical gold rather than paper gold. The gold is held in a depository, such as a bank or storage facility.
It is important to have as much physical gold as possible in your gold IRA because the value of gold is determined by the amount that exists in the world. Gold is typically valued in troy ounces, but gold IRAs can also be held in grams.
There are two different types of gold IRAs. The first is a gold bullion IRA, which stores the gold in the form of a bar or coins. The second is a Direct Participation Program, or DDP, gold IRA, which stores the gold in the form of a certificate issued by a gold mining operation.
Gold Bullion
One option is to buy physical bullion and store them in a secure location. Gold bullion is available in varying quantities. For example, 1 oz. gold bullion bars are .9999 fine.
Gold ETFs
Another popular option for those looking to invest in the precious metal, is to invest in a Gold ETF. These funds invest in gold bullion. The ETFs include the most popular metal:
iShares Gold Trust ETF (IAU)
SPDR Gold Shares ETF (GLD)
iShares Silver Trust ETF (SLV)
VanEck Vectors Gold Miners ETF (GDX)
Gold Futures and Options
Gold futures and options are one of the most liquid ways to trade gold. Gold futures are bought on margin, meaning only a percentage of the contract's price needs to be paid upfront. Gold futures are cash settled, meaning the contract is settled for the actual cash value of gold at the time the contract is settled.
Gold options are contracts that grant the right to buy or sell gold futures at a specific price on or before a certain date.
Other Gold IRA Investments
1. Gold Bullion Coins
These coins are minted from the gold bullion that backs them. They come in a variety of designs, sizes, and weights. Collectors also love to collect these coins, which can increase in value.
2. Gold Coins
These coins are minted from gold and other precious metals.
3. Gold Futures
Gold is one of the most highly-sought investments. Gold futures are essentially contracts that guarantee delivery of gold at a future date. They are traded on the CME Group (CME) and the COMEX exchange (COMEX), and are subject to market fluctuations.
4. Gold ETFs
Gold ETFS, or exchange-traded funds, allow investors to invest in the gold bullion market. ETFs are traded like stocks and can be purchased or sold on an exchange. Gold ETFs invest in physical gold bullion and cash in U.S. dollars.
