Are Gold IRAs safe?

A Gold IRA is an intriguing financial instrument which offers Portfolio diversification, a hedge against economic uncertainty, and Wealth preservation over the long-term. Along with these important benefits, Gold IRAs provide the only way to purchase physical Precious metals using your tax-advantaged retirement savings. They are also one of the few ways you can safely move your hard-earned savings out of paper Investments and into tangible assets.

Moving your retirement savings from traditional Investments (Stocks, Bonds, and Mutual funds) to physical Gold is not a trivial thing to do. It is important that you do some research before making this move, and it is certainly understandable that you are asking the question, “Are Gold IRAs safe?”

The growing interest in alternative Investments for retirement

As the ravaging effects of Inflation take hold and the safety of traditional Investments becomes more uncertain, investors are turning to physical Gold and Gold IRAs as a way to offset financial risk and, perhaps, earn higher yields than are available with Stocks, Bonds and Mutual funds. This growing interest in alternative retirement Investments is also driven by the historic performance of Silver and Gold during the Inflation / stagflation that occurred during the 1970s.


Perhaps you are noticing that the economy of today shares several similarities with the economy of the 1970s. During that period deficit spending was out of control, interest rates were rising, the energy supply was at risk, and geopolitical tension between countries was elevated. These conditions led to dramatic price increases in both Gold and Silver, with the yellow metal rising from $40 an ounce in 1971 to $850 an ounce in 1981 and Silver increasing from $1.55 an ounce to $50 an ounce.


There are no guarantees in the world of financial Investments, but many people believe that Precious metals will repeat their performance of the 1970s while also providing safety for their Retirement accounts. If you want to protect and preserve your Wealth while minimizing the volatility of your retirement Portfolio, a Gold IRA is certainly a compelling Investment option. To find out if a Gold IRA is appropriate for your unique circumstances, contact Augusta Precious Metals and request their comprehensive investor education package which includes their Gold IRA Company Integrity Checklist.

The case for Gold IRAs

Historical stability and value of Gold

Before we explore Gold IRAs in depth, let’s focus on physical Gold itself since that is the primary asset you will hold in your Gold IRA account.

There are several key points to understand about the history of Gold and its role as a store of value:

1. Humans have treasured the beauty of physical Gold for thousands of years. For at least 6,500 years they have used the yellow metal to adorn themselves and to create objects of art that they could appreciate and share with others. Based on this long history, it would not be unreasonable to say that human beings have an affinity for Gold that forms a part of their very makeup.

2. Gold has also been used as a circulating currency and store of Wealth for at least two thousand years. Gold currencies were first introduced in Lydia (modern day Turkey) and China around 2,700 years ago and then became widespread as the Roman culture made standardized coinage popular throughout the World. During these times Gold was widely recognized as a store of value and stable mechanism of exchange.

3. It is only in the last 200 years or so that Gold’s role as a store of value and means of exchange has come under question. This period of time just happens to coincide with the rise of central banks and their introduction of fiat currencies. While the central banks have held onto physical Gold as a reserve asset, they have promoted the idea that Gold is a barbarous relic with no role in modern society. Obviously, if that were true, they would divest themselves of their Gold holdings in favor of some other asset that could act as a better store of value.

As you continue to explore the role that physical Gold can play in your retirement Portfolio, keep the points above in mind. It is clear that Gold has a long history of being valuable to human beings and it is reasonable to assume that this role will continue into the future (regardless of what central bankers would like you to believe).

Gold as a hedge against economic uncertainty

Gold acts as a powerful hedge against economic uncertainties because the price of Gold tends to move in the opposite direction of traditional assets like Stocks, Bonds, and Mutual funds. In other words, when paper assets are losing value physical Gold tends to gain value. This occurs because investors seek the safety of tangible assets like physical Gold when they become nervous about rising geopolitical tensions and see their paper Wealth being evaporated in a deteriorating economy.

Gold also gains value as Inflation erodes the Purchasing power of fiat currencies like the US Dollar and Euro. There are two strong proofs of this tendency:

1. A single ounce of Gold in the 1920s (with a government-mandated price of $20 per ounce) was enough to purchase a bespoke (i.e., high-end) man’s suit. Today, an entry-level Armani suit costs $1700 to $2000 and the price of Gold is about $2000. That means Gold has retained its value for more than 100 years despite the ravages of Inflation.

2. Similarly, a Ford model T in 1920 cost $500 which was the equivalent of 25 ounces of Gold. Today, those same 25 ounces of Gold are worth approximately $50,000 which is more than enough to buy a nice sedan, SUV, or even an entry-level luxury car. Again, Gold has held its value (Purchasing power) for more than 100 years.

Up to this point we have been talking about physical Gold in a generic sense while emphasizing the safety it can provide for your hard-earned savings. Let’s return now to what we briefly mentioned at the start of this article: Gold IRAs are the only way for you to protect your tax-advantaged savings with physical Gold. If you recognize the value of physical Gold, and want to protect your retirement savings by diversifying into the yellow metal, a Gold IRA is the only tax-advantaged Investment vehicle that allows you to do that. Continue reading to learn more about Gold IRAs or, to get started now, reach out to Augusta Precious Metals and they will provide you with the Gold IRA Company Integrity Checklist along with an informative investors kit.

Diversification for a well-rounded retirement Portfolio

Financial advisors talk about the importance of diversifying your Investment portfolio but, upon close examination, it becomes obvious that most of their recommendations involve paper assets. Furthermore, they typically suggest that you buy the Stocks, Bonds, and Mutual funds being offered by their firms because they earn a commission when you buy these products.

To receive unbiased Investment advice, you must hire an Investment advisor who has a fiduciary duty to you. This means they are legally required to put your interests in front of their own interests and the interests of the firm they represent.

When you find an unbiased advisor, they will explain how true Portfolio diversification involves spreading your hard-earned savings into a mix of paper assets (Stocks, Bonds, and Mutual funds) and tangible assets like physical Precious metals and Real Estate.

There are several reasons why physical Gold is the ideal asset for achieving effective Portfolio diversification:

1. It only takes a small amount of Gold to offset the financial risks that are inherent in traditional (i.e., paper) Investments and in Real Estate. Investing just 10% of your overall retirement savings into Gold is enough to insure the rest of your Portfolio.

2. Physical Gold has zero counter-party risk. When you own physical Gold you have an asset with intrinsic value and that value can’t be diminished by the actions of a third-party.

3. Computer models show that the volatility (ups and downs) of an Investment Portfolio can be substantially reduced when 3 to 10% of the Portfolio is held in Gold.

4. In comparison to successful Real Estate investing, it only takes a little bit of specialized knowledge to successfully invest in physical Precious metals.

Dissecting myths about the safety of Gold IRAs

There are some common myths about the safety of investing in physical Gold and Gold IRAs:

Myth

Reality

Gold is volatile and inherently risky

Over short time periods Gold can be volatile just like all other Investment vehicles. For long-term Investments and retirement savings, however, Gold acts as a stable store of value while providing a hedge against economic uncertainty and the ravages of Inflation.

Gold is subject to confiscation by the government

This myth is fueled by the government’s actions in 1933 when American citizens were ordered to give up their Gold. During that time, however, the country was on a Gold Standard (i.e., Gold was money) so a case could be made that recalling the citizen’s Gold was required to strengthen the country’s economy. Today, we have a fiat monetary system (i.e., money by decree) and central banks are telling us that Gold is a barbarous relic. Confiscating Gold in today’s monetary environment would have no justification.

Gold has no intrinsic value

6,500 years of human history shows that this myth is not only unfounded, it is laughable.

Gold is illiquid and difficult to sell

In contrast to this myth, Gold is actually the most liquid asset on the planet. Just take your physical metal to any Gold dealer, your local Coin shop, or your local pawn store and they will gladly exchange your Gold for fiat currency.

Gold is prone to scams and fraud

All financial Investments involve risk – this is an inescapable fact of life. To minimize risk, it is critical to work with reputable Gold dealers who can ensure the safety and legitimacy of the physical Gold you purchase.

Gold Coins are overpriced relative to the price of Gold

There is an element of truth here but, to be accurate, we have to say that only some Gold Coins are overpriced. If you limit your purchases to one-ounce Gold Bullion Coins only, you can avoid overpaying for your Investment in physical Gold. Stay away from proof Coins, limited edition Coins, special edition Coins, Coins in fancy boxes, Coins with certificates of authenticity, and fractional-ounce Coins.

Are Gold IRAs a safe Investment?

We return now to the key question, “Are Gold IRAs safe?”

In this brief article we have focused on how physical Gold can safeguard retirement savings against economic turmoil. We also touched on how Gold acts as a safe-haven asset in difficult economic times like the 1970s and pointed out that we are currently experiencing economic conditions which are very similar to the 1970s. What we haven’t addressed yet is the safety of the Gold IRA vehicle itself, including how and where your physical Gold will be stored – let’s do that now.

Are Gold IRAs approved by the IRS?

IRA accounts were established in 1974 by the Employee Retirement Income Security Act (ERISA). In 1997 the Taxpayer Relief Act (TRA) added Gold and Silver to the asset categories that could be held in IRA accounts. Through an expansion of the TRA in 1998, Platinum and Palladium were added to the list of IRA-approved assets.  The enactment of these pieces of legislation tells us that Gold IRAs are approved by the IRS and that the IRS considers these Investment vehicles to be safe, or at least as safe as any other tax-advantaged Retirement account.

Where will the Precious metals in your Gold IRA be stored?

One of the IRS regulations for a Gold IRA is that the Precious metals in the account are held by a third-party Custodian who is registered with the Financial Regulatory Authority (FINRA). This Custodian will provide secure storage for your metals along with insurance coverage for the full value of your holdings.

While the idea of storing your Gold with a third-party Custodian may be a little disconcerting at first, understand that this arrangement is no different than you currently have for the Stocks, Bonds, and Mutual funds your existing Retirement accounts. In both cases, a registered Custodian holds your Investments in your name and ensures that your assets are securely stored. The only difference is whether the assets are paper (Stocks, Bonds, and Mutual funds) or physical Precious metals.

The bottom-line is that Gold IRA accounts are safe Investments. Gold IRA Retirement accounts were established through legislation more than 25 years ago and the Precious metals in the accounts are stored by registered Custodians with secure, insured vaulting facilities.

Executive summary

Here’s a quick recap of the ideas we have covered in this article:

  • For thousands of years humans have valued Gold for its beauty, its role as a store of value, and its usefulness as a medium of exchange
  • Gold acts as a hedge against Inflation
  • The price of Gold tends to rise in economically challenging times like the 1970s
  • Gold provides diversification for an Investment Portfolio
  • The common myths about investing in physical Gold are just that – myths
  • Gold IRA accounts were established through legislation and they are approved by the IRS
  • Precious metals held in a Gold IRA account are securely stored and insured by a registered Custodian

You can start a Gold IRA today by contacting Augusta Precious Metals and requesting their Gold IRA Company Integrity Checklist. They will provide you with free information and they will work with you to determine if a Gold IRA is appropriate for your unique financial situation and retirement objectives.

 As always, performing due diligence and obtaining expert advice are important when you are establishing or making changes to your retirement strategy. At Satori Traders we do our best to help you in this process by providing free information about Precious metals in general and Gold IRAs in particular. If you have questions about either topic, please feel free to contact us and we will answer your questions to the best of our ability.

About Satori Traders

Hi, my name is Bryan Post and I love the shiny stuff - Silver and Gold.

I've been investing in the Precious metals and mining stocks since 2002 when I realized that Gold is the only real money on the planet.

Here on SatoriTraders.com I share everything I've learned about the metals, Financials markets, trading, Technical analysis, and the numerous games that central banks play with fiat currencies.

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