Why are gold Eagles allowed in IRAs and not gold Buffalos?

cohodk

My wholesale buddy is in Las Vegas and he tells me that Eagles are trading at about a $200 premium over the Buffalos because the Eagles can be put in IRA accounts? Seems to me to be an opportunity for an arbitrage play. But why are the Buffalos not allowed? Could they be allowed in time?

derryb

Wrong, per Doug Casey, and he's the man on gold matters:

"In 1986, as the U.S. Mint began issuing gold coins for the first time since 1933, a tax rule against holding "collectibles" in an IRA was relaxed to allow gold and silver Eagles. Later, in 1997, the Tax Payer Relief Act opened the IRA door for a broad spectrum of precious metals (gold, silver, platinum, and palladium), whether in the form of bullion or coin. The easier rules now apply to all types of IRAs, including traditional, Roth, Simplified Employee Pension (SEP) and Simplified Incentive Match Plans for Employees (SIMPLE).

The only stipulation is that all bars and all coins other than Eagles must be .995 fine. Thus Canadian Maple Leafs and Austrian Philharmonics qualify, but the South African Krugerrand, minted with an alloy, does not. Numismatic coins are also impermissible for an IRA."

From this article:
gold IRA

Also, you can just send PMs to your IRA. You have to make arrangements for the holder of the IRA to make the purchase. I suspect the gold eagle you are referring to are trading at a higher premium because investors that know little about buying gold are being advised to by gold eagles.

roadrunner

The other "hitch" with gold coins in the IRA is that you don't have control over them, the sub-custodian does. And when it comes time to pay you off, you get cash...not your gold coins. To me, this is no different than an investment in an ETF like GLD. It comes down to the reliability of the sub-custodian. The primary custodian is basically hands off. More than likely your gold coins will end up the same places that the GLD gold is kept. And the gold held by sub-custodians is never physically audited by the auditors. They aren't even allowed to show up and peek into the vault area. Sorry, not for me. If it's not under your direct control, you're just a potential victim.

roadrunner

coynclecter

if eagles are selling for 200 over spot Id like to know about it. Ill be glad to sell some of my IRA gold at that premium.

Bullion direct has them listed at 1000

jmski52

As I think about it, they must have spent lots of legal time and foresight into thinking about how to make putting gold into an IRA extremely disadvantageous and unpalatable.

If only they would put that much time into things like protecting the value built up in our retirement savings, eliminating leverage in banking or in enforcing their own rules on commodity trading.

PerryHall

Another problem with gold in an IRA is the government knows about it.

cohodk

<< <i>Wrong, per Doug Casey, and he's the man on gold matters:

"In 1986, as the U.S. Mint began issuing gold coins for the first time since 1933, a tax rule against holding "collectibles" in an IRA was relaxed to allow gold and silver Eagles. Later, in 1997, the Tax Payer Relief Act opened the IRA door for a broad spectrum of precious metals (gold, silver, platinum, and palladium), whether in the form of bullion or coin. The easier rules now apply to all types of IRAs, including traditional, Roth, Simplified Employee Pension (SEP) and Simplified Incentive Match Plans for Employees (SIMPLE).

The only stipulation is that all bars and all coins other than Eagles must be .995 fine. Thus Canadian Maple Leafs and Austrian Philharmonics qualify, but the South African Krugerrand, minted with an alloy, does not. Numismatic coins are also impermissible for an IRA."

From this article:

Gold IRA

Also, you can just send PMs to your IRA. You have to make arrangements for the holder of the IRA to make the purchase. I suspect the gold eagle you are referring to are trading at a higher premium because investors that know little about buying gold are being advised to by gold eagles. >>




Your link didnt work, but I found it anyway.

Still doesnt explain why Eagles are trading at higher and substantially so, prices.

Personally I see no reason to buy physical gold in an IRA when the paper version will do just fine. But, alas, that is another topic.

Casey

derryb, in your last paragraph, I believe you meant to say ...you "can't" just send PMs to your IRA...

derryb

cohodk,
thanx, link fixed.
If I wanted gold in an IRA, I would avoid the gold ETFs (do they really have all that gold in their possesion) and I would stick with the junior gold (and especially silver) mining stocks. I personally maintain on-line access to my IRA brokerage accounts and do the trading myself. Broker is just another way of spelling banker.

cohodk

Thanks derryb.

It doesnt really matter to me if the ETFs own gold or not. What is important is that it tracks the price of gold. It is just an increase in, "gasp", dollars that is important to me.

jmski52

It doesnt really matter to me if the ETFs own gold or not. What is important is that it tracks the price of gold.

I had a brokerage account within an IRA at TRowe Price and I could trade ETFs at will. The ETF is treated as a stock and isn't subject to the limitations of holding gold in an IRA.

Of course, that was back when I trusted paper assets somewhat.

derryb

<< <i>Thanks derryb.

It doesnt really matter to me if the ETFs own gold or not. What is important is that it tracks the price of gold. It is just an increase in, "gasp", dollars that is important to me. >>


It only closely tracks the price of gold because it is believed that all of the ETF shares are being backed by gold in the ETF.s possession. But, when the cat gets outta the bag, and it becomes known that the gold (or silver) ETF's do not have the gold (or silver) they have sold to investors, the dollar value of the ETF is gonna crash. I wouldn't want to be holding any of the ETF shares if that were to happen.