IRA Approved Precious Metals: Which Ones Are Eligible?

Precious metals have always captivated us and flipped that shiny dopamine switch in our brains whenever we look at them. It’s no wonder people are fascinated by them and want to invest in them.

Whether investing, speculating, buying, or collecting, you can benefit from an IRA-approved precious metal.  Gold, Silver, Platinum, and Palladium are the only four precious metals approved for an individual retirement account (IRA).

People invest in them to counter inflation and diversify their investment portfolio.  Just why are these precious metals the only ones IRA approved?

And why are more people investing in them now more than ever?  Read on to find out what is crucial to know about IRA approved metals.

Precious Metals, IRA, & Investments

People invest in each precious metal for their IRAs through a different approval process to be considered suitable retirement investments.

Returns are not guaranteed, just like any retirement investment; however, previous metal IRAs have a vital role in allowing investment portfolios to have a diverse mixture of low-stock and high-stock assets and maintain purchasing power over inflation.

Gold

Gold has been available for IRA investments since 1997, which first allowed people to invest in gold coins. Later in 1998, IRAs were able to invest in gold bullion also.

The American Internal Revenue Service (IRS) has to approve the types of gold allowed to be invested by IRAs. This gold must be in the form of collectible coins or gold bullion with a gold purity of 99.5%

Gold coins are generally more popular than gold bullion because they are collectible items. Gold coins are harder to counterfeit and can be traded at a lower price.

Gold bullion, by contrast, is easier to counterfeit, and since it is held in significant quantities, the price of trading can be prohibitive for retail-level investors.

Another reason gold coins are so popular is that IRAs are generally restricted from investing in collectibles, with gold coins being an exception to this rule.

Still, experts warn you to know what you are getting into before opening a gold IRA.  Gold is the most commonly purchased precious metal of the four different allowed IRA investments.

People often use the term “gold IRA” to mean any precious metal retirement account since they usually contain a mixture or majority of gold investments.

Silver

IRA silver has been available for the same amount of time as gold has. First available in 1997 as coins and then in 1998 as bullion. Investment silver must be 99.9% pure.

Silver is also similar to gold as it is seen as a hedge against stock market downturns and rising inflation.

Silver isn’t as popular as gold because it has a mixed history of success, as, during the 2007-2009 recession, its price fell significantly and scared away potential investors.

Since a primary reason people invest in precious metals is to spread their stock portfolio risk out, all their eggs in one basket, the fact that silver came up short during a recession makes it one to be more cautious of.

Platinum

Platinum has been one of the IRA approved metals since 1998 and is available for investment in the form of coins and bullion. Popular forms are in the platinum American Eagle coins and the Platinum Canadian Maple Leaf coins.

Great Britain and Australia also produce platinum coins but are not as famous for investment due to the distance of these countries from the United States.

The IRS dictates that Platinum must be 99.95% pure to meet IRA requirements. Commonly, platinum will be compiled into 50-ounce bullions since smaller bars will have to be manufactured to an exact weight specification.

Platinum isn’t as popular as gold because it typically has a higher price, though there have been times when the cost of platinum has dipped below gold.

It has a better track record than silver in times of economic hardship. Still, it is held back by the fact that the manufacturing process of platinum wasn’t as developed as gold or silver for many years, leading to an increase in rarity.

With the advent of innovations and technologies, you may see a growth in demand for platinum that no one has seen yet.

Palladium

Palladium was also introduced as one of the IRA approved metals in 1998, with coins and bullion being the types allowed by the IRS.

Like platinum, palladium must be 99.95% pure to meet the IRS requirements for IRA portfolios. American Eagle also produces collectible palladium coins, but Canadian Maple Leaf coins are overall more attractive. 

Palladium is not as rare as platinum and has a similar look. People will often choose palladium because it has the look of platinum without paying the premium price of a platinum collection.

It is still far more scarce than gold and silver and has experienced demand that has outstripped its supply for the first time for the past few years, leading to it overtaking the gold price in 2019.

However, because people use palladium in car manufacturing, the price began to struggle once car production tanked during the COVID-19 pandemic, making it a cautious investment because it doesn’t universally hold its value.

Final Thoughts

Deciding to invest in a precious metals IRA, one that has IRA approved metals, will come down to your personal situation.

Consider whether the tradeoffs of low liquidity might be a long-term buffer against inflation on your portfolio and whether your investment portfolio has room for precious metals.

You should also like what you are investing in. Don’t just follow the crowd; make sure your investments will give you both satisfaction and long-term rewards.

Eligible IRA Metals FAQ's

Here are some of the most frequently asked questions I see on this topic.