If you have been looking into investing in gold with which to invest in a Gold Roth IRA, you might be wondering what the parameters of such an undertaking might be. At the top of your list of inquiries may be this important question: What kind of form of gold can I invest in my Gold Roth IRA?
WHAT CONSTITUTES AS PHYSICAL GOLD?
In general, when it comes to investing gold into one’s IRA, there are only two forms of gold that are deemed acceptable. The first form of gold one may invest in comes in the shape of gold Eagle Coins. The second form is Gold Bullion (bars of gold), and while both are physical manifestations of gold (more on this in the next section), they are not weighted evenly.
While it is true that the value of $5,000 in Eagle Coins is equal to $5,000 in Gold Bullion, there is one major drawback to Eagle Coins. Though it is rare, a case of misplaced or stolen gold from your IRA draws the fine line between the two forms. Should your Gold Bullion go missing, you are entitled to the full value of the missing sum. Eagle Coins, however, are only insured for up to $50 per missing or stolen coin. This could potentially bite you, should the unthinkable come to fruition.
WHAT DOES NOT CONSTITUTE AS PHYSICAL GOLD?
Given that the line for what constitutes “acceptable” physical gold has been drawn, we now know that other forms of gold do not qualify as additions to your Gold Roth IRA. Such undesired gold includes:
Gold coins (that aren’t Eagle Coins)
Gold antiques (watches, house dressings such as candle holders, etc.)
And so on…
If you own any form of gold that is not accepted by the institution providing your Gold Roth IRA, there are ways around the problem. For instance, some businesses will give you the cash equivalent of any gold you send them. After you receive your cash, you can invest it (up to 5K per year) into your Gold Roth IRA. However, I cannot stress this vital point enough: Always research these companies thoroughly before doing business!
Along with the above method, one can also try making cash by investing in gold as a commodity. This can be done in two ways, each with its advantages.
ETF: Exchange Traded Funds are similar to buying stock options. When you purchase one share of an ETF with your money, you will be trading that cash for the accurate movements of the commodity in question – gold in this case. The value of every share in an ETF of gold equates to 1/10 of an ounce. So, let us say that the value of gold reaches $2000 per ounce. This means you will make $200 per ETF.
Trade: One can invest in gold by trading in the futures and options of the commodity. This is similar to Forex Trading in that, as opposed to trading the commodity itself, you will be investing in the potential gain for gold. The cash you stand to make depends upon how closely your projection lands to the actual value at the time of closing.
As you can see, there are several ways to invest in your Gold Roth IRA. Some are more secure than others, but all are completely viable options. The route you choose relies solely upon your needs, and how willing you may be to withstand potential losses.