Why Should You Invest in Precious Metals?

There are many options available for someone looking to invest their money with metals.com. Whether you are a first-investor with some extra cash that you would like to put toward your future or a seasoned expert looking to diversify your investment portfolio, you have probably heard at some point to think about investing in precious metals. Precious metals are a great investment opportunity that allows you to enjoy steady gains without taking unnecessary risks. These investments also give you the benefit of being in complete control of a physical investment with long-term market value. Our wide selection of silver and gold on metals.com is one of many reasons why we are the best online site for metal investments. These are just a few of the reasons why investing in precious metals is a smart move for investors of any experience level.

What Are Precious Metals?

Precious metals are organic chemical compounds prized for their rarity, shining appearance, and economic value. Many industries use precious metals in manufacturing, including the automotive, construction, and technology industries.

When most people think of precious metals, they think of gold, silver, platinum, and palladium. However, other members of the platinum family fall under that heading as well, including ruthenium, rhodium, and iridium. All these metals have a market value (though of varying rates) and fall under the broad umbrella of precious metals.

There are several different forms an investment in precious metals can take. Since they are a physical investment, precious metals have an actual physical weight and size and need physical storage space as well. You can buy bullion in the form of coins (including coin collections, which can be quite a profitable investment), rounds, or bars. Each of these has its own distinct advantages and disadvantages and investors should compare carefully before deciding which option is best for them.

Are Precious Metals a Good Investment?

Investing in precious metals is a simple and lucrative way to diversify your investment portfolio. One primary benefit of buying precious metals is the stability of their worth over time in comparison to paper money and many other types of investments. This stability especially exceeds that of investments like stock and exchanges. An upside of this is that precious metals insulate their investors from sudden fluctuations in the market. Because of these factors, precious metals are renowned for maintaining and sometimes even increasing their worth during severe economic downturns, giving them independence from inflation based on the value of the dollar. In addition to these benefits, precious metals have the bonus of being tangible investments, which many investors value as added security, since you can control and monitor them as literally as possible (unlike investments like stocks and bonds). We value our customers and promise a 100% secure shopping experience.

Investing with metals.com also allows you to diversify your portfolio, a practice financial and investment advisors recommend. Diversification helps to insulate you from potentially drastic consequences should a single investment fail. Stocks can go up and down almost unpredictably, but precious metals tend to maintain or grow their value. Additionally, most investors will typically only have a portfolio made up of their local currency but investing in precious metals allows you to diversify in such a way that your portfolio becomes at least partially independent of national currencies.

The incredible stability of precious metals is clear in their ability to hold their value over time. Even certain other types of investments use precious metals, such as a precious metal IRA, to back up the value of the funds, protecting them in case of economic uncertainty.

Another benefit of investing in precious metals is the variety of ways to invest. There are options for which kinds of metals to buy and what form investors should take, whether that be in coins, rounds, or bars. One popular way to invest is by collecting rare precious metal coins, which are consistently a popular alternative due to their historic value. Investors can find precious metal coins ranging from outdated modern currencies to ancient legal tender.

What is the Best Way to Invest in Precious Metals?

Increasingly, investors hear the best way to invest in precious metals is through exchange-traded funds, or ETFs. However, there are several drawbacks to investing in ETFs rather than physical precious metals. One of these is that investors usually have no claim to the physical precious metals they are investing in until they reach an exceedingly high threshold. Even in this case, the ETF provider often has the right to simply pay you your investment in cash, meaning the worth of your investment rather than your physical precious metals.

Simply put, the best way to invest in precious metals is to physically own them. That way, you, yourself, oversee your investment. On top of that, tangibly possessing your investment ensures the best protection against risk if an unforeseen financial crisis.

How to Choose the Right Precious Metal to Buy

There are plenty of things to take into consideration when choosing which precious metal to invest in, that is why we have built our team on not just their leadership, but their extensive knowledge and insight to help you with your investment. Gold is a particularly popular choice for investors, as it is known to hold its value during times of market fluctuation and maintain this long-term. While it does tend to yield great returns, however, gold can also be quite expensive to buy, which may make it an unwise choice for first-time investors unless they have significant funds in place.

Silver may seem like a comparatively better choice for first-time investors, as it is much less expensive and therefore presents the opportunity to make multiple smaller investments over time. Silver’s widespread industrial use in every sector from technology to solar energy means it is consistently in demand. However, because silver is comparatively low-priced, and you will need to buy more to achieve a significant investment, investors may find it a difficult physical investment to store.

Palladium is a precious metal that has significant usage in the automotive industry, making it a highly valued substance for that sector. Palladium and platinum often follow one another quite closely in trends and market values, but palladium can be a useful investment to achieve further diversification of your portfolio.

Platinum is also often in demand in both the automotive and jewelry industries. In fact, it has often been more expensive than gold, making it a valuable investment that also tends to hold its value better during market fluctuations since it receives less market and investor attention than gold or silver.

There are other precious metals to choose from as well, each with its own distinct advantages over a variety of industrial sectors, and these may be good investments to diversify and strengthen your portfolio. However, the four listed above are the most popular investments due to their steady value and reliable increase over time.

How to Purchase Precious Metals

Metals.com is the best and most prudent way to embark on your investment. With the advent of the internet, investors can not only compare many different options, but do research into the topic of investment and precious metals and even draw on the knowledge of experts. You can also track market values in real time and even speak to other investors and financial advisors.


In the past, technology limited investors to buying in person or over the phone or catalogues, which narrowed their options and knowledge of their investments.

Historically, the best precious metals to invest in have been gold and silver, and the 2018 market promises to be no different. Gold ended 2017 in its most profitable year since 2012. Since the beginning of the year, both gold and silver have been holding steady gains.

What is The Typical Return on Precious Metals?

Investments in precious metals vary on return in a given year. Precious metals tend to do particularly well even when the stock market is collapsing, rising in value when the dollar is going down. When stocks go down, people tend to turn to alternative investments, fearing a market crash. This means that the value of precious metals rises quickly during times of economic uncertainty. The bottom line is that precious metals are security measures for many investors in a market full of sharp fluctuations and volatility.

What Are Risks of Investing in Precious Metals?

The nature of investment is that it always involves some risk. It is impossible to anticipate exactly how a certain investment will perform, and investors cannot bank of success. This is true of any type of investment, whether it be in stocks, precious metals, or anything else. For this reason, it is prudent to speak to a financial or investment advisor before making any type of investment, so you use your money as wisely as possible

One risk of investing in precious metals is the obvious potential for market fluctuations. It is always possible for the value of your gold bars to drop sharply or suddenly based on movements in the local or global market. Though precious metals tend to perform well and maintain their value, you should not regard them as a safety net or sure bet.

If you invest in a rare coin collection or similar item and are seeking a buyer, it may take a significant amount of time before you see financial gains. Such a process entails finding an interested party and arranging transactions with them. Similarly, if your collection has value because of its age or historical significance, it may take some time for it to gain enough value to garner buyer interest.

One last risk of investing in precious metals may seem obvious: they are physical investments and as such, are subject to theft. Thankfully, there are some fail safes available to you on this front, such as safes or bank vaults, if you are uneasy having a large tangible investment vulnerable in your home.

Are There Any Precious Metals That I Should Avoid?

In general, any precious metal is a fair investment. However, most investors focus on the “big four”, which are gold, silver, platinum, and palladium. This is for the simple reason that these precious metals carry the highest value and tend to yield the best returns. Some investors view gold as the most reliable (though also the most expensive) investment, since it tends to maintain a steady market value, while other precious metals like silver tend toward more dramatic fluctuation. On the other hand, some investors find it worthwhile to buy less popular precious metals like rhodium, which has a lower value but is also more insulated from severe market volatility. The metals.com team provides you with the best solutions to find what investment fits your needs. All, any of the metals that fall under the umbrella of precious metals is a fair investment with distinct advantages and disadvantages.

As with any investment, high-risk precious metals have the potential to yield high returns, while lower risk metals tend to yield lower but more reliable returns. Consider your personal financial situation and investment security. If you decide to make an investment in a higher value precious metal like gold, make sure you have funds in place to protect yourself if market fluctuations mean you lose the value of your investment. Precious metal investments are generally safe and reliable investments that result in returns, and investors can rest easy knowing that the gold or silver market will probably not wildly change from day to day. For this reason, investing in any precious metal can be a prudent move, though there may be one or another that better suits your financial situation and investment goals.

A small practical consideration exists for silver investors: because the price of silver varies from other precious metals, you will probably need to buy more physical material to make a sizeable investment. Realistically, this means you need to make sure you have adequate storage space for silver bullion, whether it be in bars, coins, or rounds.

 

401k Rollover to Precious Metals IRA

What Is a 401k Plan?

 

A 401k is a tax-deferred retirement savings account by an employer. It allows employees to contribute and invest a portion of their pay check before taxes are taken out. Taxes are not paid until the money is withdrawn from the account. With a 401k plan, employees control how their money is invested and although most plans offer a spread of mutual funds, they may be limited in the investment choices available.

Investors today seek to diversify their portfolios, and many are looking for ways to own precious metals funds, such as silver and gold. Investing in these precious metals provide balanced portfolios and give investors insurance, as the value of precious metals generally hold value within unstable markets. They also provide a hedge for purchasing power, as it generally remains intact as inflation slowly devalues physical currency. 

 

What Is a 401k Rollover?

 

“Rolling over” refers to the transferring of a 401k account from a former employer. The first step to investing in precious metals is rolling over funds into a gold or silver backed IRA account. A self-directed IRA gives an investor the freedom to choose what to invest in. Many people are not aware that a self-directed IRA account gives them the power to invest in alternative asset classes such as precious metals.

 

Most Recommended IRA Approved Precious Metals

 

Gold

  • American Eagle Coins
  • American Buffalo Coins
  • Australian Kangaroo Coins
  • Austrian Philharmonics
  • Canadian Maple Leaf Coins
  • Various Bars and Rounds

                       

Silver        

  • American Eagle Coins
  • Mexican Libertad Coins
  • Canadian Maple Leaf Coins
  • Australian Kookaburra Coins
  • Austrian Philharmonics
  • Various Bars and Rounds

 

Other IRA Eligible Precious Metals

In addition to gold and silver, many investors are unaware that platinum and palladium may also be added to an IRA.

 

IRA eligible platinum include:

 

  • British Coins
  • Austrian Coins
  • Australian Koala Coins
  • American Eagle Coins
  • Canadian Maple Leaf Coins
  • Various Bars and Rounds

 

IRA eligible palladium include:

  • American Eagle Coins
  • Canadian Maple Leaf Coins
  • Various Bars and Rounds

 

Benefits of a 401k to Silver and Gold IRA Rollover

  • Diversifies your portfolio—Additional asset classes allow you to strategically balance your portfolio.
  • Regards to inflation—Investors often buy precious metals to try to hedge against inflation. Some believe that precious metals may not lose value like other assets during times of high inflation.
  • Dollar devaluation—Some investors buy precious metals to hedge against the dollar. Similar to inflation, as the value of paper currency is eroded, goods and services become relatively more expensive. Silver and gold are denominated in U.S. dollars and at times, exhibit an inverse correlation to the dollar. Often times when the dollar falls, gold and silver rise. Conversely, the value of gold and silver may decline when the dollar is rising.
  • Reliable store of value— Precious metals have been used for transactions for thousands of years all around the world and have proven to be a reliable store of value over time. They are still recognized today for their value.
  • No counterparty risk—Unlike paper currency investments, physical metals cannot go bankrupt or default on an obligation.

 

401k to Gold IRA Rollover Step-by-Step Guide

  • Once the IRA custodian has received all necessary paperwork and funds, you may shop various gold and silver dealers for the products you wish to purchase.
  • Once you have decided on a purchase and locked in a price with the precious metals dealer, the dealer will invoice your IRA custodian for payment.
  • The IRA custodian and the precious metals dealer will arrange for shipment of your precious metals to an approved depository.
  • Your IRA custodian will provide you with regular account statements on your gold or silver holdings.

 

There are several things to consider when rolling over an old 401(k) plan into a self-directed precious metals IRA account. Some issues to consider are:

  • Choice of custodian
  • Choice of depository
  • Gold or silver products to purchase
  • Ongoing contributions

There are many gold and silver IRA custodians to choose from. When comparing IRA custodians, some things one may want to compare include length of time in business, customer reviews and fees and expenses. Custodians may be compared online from the comfort of your home or office. The same can be said for choosing a depository. There are numerous approved depositories to choose from in various locations. You may want to compare fees and expenses, as well as security and/or any insurance provided.

 

  • Set up IRA – How To?

    • The first step to investing in a precious metals IRA is to rollover a 401k plan from a former employer. The process is relatively quick and can be completed in a short period of time.

 

  1. Select an IRA custodian who offers a Precious Metals IRA.
  2. Complete all paperwork with your preferred custodian to finalize the transfer of your 401k funds from your previous account to your self-directed IRA account.
  3. Shop for various precious metals on Metals.com that you wish to purchase.

 

  • Choose a Custodian

Self-directed IRA accounts are held by an IRA custodian or trust company. These companies act as a fiduciary on behalf of the account. Some of their responsibilities include: account setup, producing account statements, and accepting allowed contributions. There are many different IRA custodians to choose from. Metals.com can partner with any self-directed IRA custodian. Different companies charge different amounts for their services and may have varying fee structures. One can use the custodian of their choice when setting up a self-directed IRA account.

 

  • Below is a list of recommended custodians:

    • NEW DIRECTION IRA, INC. - 1070 W. Century Drive Louisville, CO 80027 Toll Free: 877-742-1270 Fax: 303-665-5962 newdirectiontrustcompanyira.com
    • GOLDSTAR TRUST O. Box 719 Canyon, TX 79015 Toll Free: 800-486-6888 Fax: 806-655-2530 www.goldstartrust.com
    • STRATA TRUST COMPANY 7901 Woodway Drive, Suite 200 Waco, TX 76712 Toll Free: 866-928-9394 Fax: 512-495-9554 stratatrust.com

 

  • Choose a Dealer

  • Once your self-directed IRA account has been established and is funded, you are now ready to make your purchase. From this point, visit Metals.com or call us at 800-463-1326 to select your IRA-eligible products and lock in pricing.

 

  • Decide on Bullion Product

    • What do I want to buy?
  • There are only certain bullion products that are eligible to be held in an IRA account, this includes gold and silver American Eagles, Philharmonics, and Canadian Maple Leaf’s. One can also purchase other IRA eligible products such as: Australian Kangaroos and silver Australian Kookaburras, among others. Visit Metals.com to view our varied selection. Certain platinum and palladium products are also eligible.

 

  • Decide on a depository

  • Metals must be stored in an approved depository, as precious metals held in an IRA account cannot be delivered to the account holder. IRA custodians can recommend a depository, but it is important to note that investors do have the ability to choose where their metals are stored from approved depositories. Depositories are a third party storage facility where customers can store their precious metal bullion. Depositories are ideal for those who have made significant investments in precious metals and do not have the capacity to store these large collections in their homes or on their property. Depositories are equipped to hold large amounts of precious metals and have been built to provide optimal protection for valuable investments. While storage at a depository can be more expensive, it spares customers from potential problems in the future.
  • Where can I find a depository?

    • Investors can find IRS approved depositories by competing a simple online search. Below are a list of a few authorized depositories:
    • Transcontinental Depository Services, LLC (tdsvaults.com) 310-587-1408
    • Delaware Depository Company (delawaredepository.com) 302-765-3889
    • Brinks (brinks.com) 804-289-9600

 

  • Make the Purchase

  • Your selected IRA custodian will handle the payment and the dealer will ship the purchased precious metals. The custodian will provide the customer with account statements, detailing their holdings and the bid or wholesale value of those holdings.

 

Any questions regarding a precious metals IRA should be directed to one’s CPA or tax professional. It is important to note that investors should consult their CPA or tax professional prior to investing.

 

FAQ

Which retirement accounts can accept rollovers?

 

All IRAs (Traditional IRA, Roth IRA, SEP IRA, SIMPLE IRA, Solo) are eligible for direct rollover. Make sure to ask your IRA custodian for details. You may also view the IRS Rollover Chart by clicking here: https://www.irs.gov/pub/irs-tege/rollover_chart.pdf or visit www.irs.gov for more information.

 

Can I transfer money from an existing IRA to fund my gold/precious metals IRA without tax penalties?

 

Yes. If you have an existing IRA or 401k plan, the simplest way to set up a new Precious Metal IRA is by a transfer, or rollover. One will need to transfer the amount they want to invest in a new IRA, and there are no tax penalties. Your IRA custodian will advise on how to do this and will administer the process.

 

When can I rollover?

 

If you are currently employed by the company that sponsors your 401k plan, you likely will not be able to roll over funds into a gold or silver backed IRA. However, exceptions may apply and it is best to check with your plan sponsor.

One could also possibly choose to keep his or her existing 401k plan and purchase physical gold or silver through a separate, self-directed IRA account.

401k accounts from former employers can be transferred into self-directed gold or silver IRA accounts, a new 401k plan with a current employer, or may be cashed out. However, cashing out can involve tax penalties and should be thoughtfully considered.

 

Can I open a new IRA?

 

Yes. An investor can open a new IRA with a contribution, however, your total annual contribution limits remain the same.

 

Can I have more than one IRA?

 

Yes. An investor may have multiple IRA’s, and your annual contribution limit will remain the same.

 

What are the costs involved in setting up a Precious Metals IRA?

 

When it comes to precious metals, or any type of investment, an investor should have a solid understanding of the costs and/or fees involved. There are many associated costs that should be considered. Due to the tax-deferred nature of an IRA account, an approved IRA custodian must be used to hold the account.  Below are some of the potential costs:

 

  • Account application fees — An IRA custodian may charge an application fee for processing a new account or an IRA 401k rollover. These fees may range.
  • Transaction fees — IRA custodians may charge a transaction fee for the sale or purchase of metals within the account. This is usually a “per transaction” basis fee.
  • Annual account fees — IRA custodians maintain accounts and take care of any account administration and bookkeeping. Fees for this may vary per year. IRA custodians will disclose their annual fees in their account paperwork. Additionally, these custodians may offer discounts based on an investors account size.
  • Wiring fees — IRA custodians charge a fee per outgoing wire.
  • Storage fees — Depositories charge annual fees in order to hold and secure precious metals. Fees may vary based on which depository is used but typical fees may range based on the value of the precious metals.
  • The cost of the precious metals — An investor will also have to purchase the desired precious metals from a dealer for his or her IRA account. In addition to the cost of the precious metals, investors may also pay premiums over the spot price (the price at which a commodity could be transacted and delivered on right now- this is in contrast to future or forward contracts. The spot price of gold or silver refers to the price of one ounce of gold or silver) based on such things as product type, demand and dealer premium.