The terms in a gold IRA dealer quote and an account agreement reduce to a short list: spot price, premium over spot, spread, custodian, depository, fineness, rollover, and prohibited transaction. This glossary defines each in one to three sentences, grouped into six sections: prices, the three parties, storage, what the IRA may hold, moving money in and out, and the rules that can end the account’s tax status.
Key takeaways
- Spot price is the market price of the metal before any dealer markup; the premium and the spread are where the dealer’s charges appear.
- Three parties hold separate roles: the custodian holds the IRA, the depository vault holds the metal, and the dealer sells the metal and may buy it back.
- Under IRC 408(m), most coins are collectibles; the bullion exception turns on fineness standards and the trustee’s physical possession.
- Transfers, rollovers, and prohibited transactions follow set rules: a trustee-to-trustee transfer is not reported as a distribution, only one 60-day rollover is allowed in any 12-month period, and a prohibited transaction can end the IRA’s tax status.
Prices
Spot price
The current market price for immediate delivery of one troy ounce of the metal, before any dealer markup. Dealer quotes start from it.
Premium over spot
The amount a dealer charges above spot for a coin or bar, stated in dollars or as a percent of spot. It is the number to compare across dealer quotes. The gold IRA fees page covers the cost layers above spot.
Spread
The gap between the price a dealer sells at (the ask) and the price it buys back at (the bid) for the same item at the same moment. The wider the spread, the more the price must rise before a sale back breaks even.
Bid and ask
The bid is the price a dealer will pay for an item; the ask is the price it will charge. The gap between them is the spread.
Buyback
A dealer’s offer to buy metal back from a customer. A buyback statement is not a buyback price; the price is set when the dealer quotes it. The checkable figure is a dated quote, not the statement.
Price lock
The moment a dealer fixes the price of an order. Until the lock, the order price is not final.
Troy ounce
The unit precious metals are priced in, equal to 31.1035 grams.
The three parties
Custodian (trustee)
The bank or IRS-approved nonbank trustee that holds the IRA, keeps its records, and reports to the IRS. The custodian holds the account; it does not sell the metal. The gold IRA custodians page covers the role in detail.
Depository
The vault that physically holds the IRA’s metal. It is a separate party from the custodian and the dealer.
Dealer
The company that sells the metal to the IRA and may buy it back. The dealer is not the custodian. Its charges appear as the premium and the spread.
Self-directed IRA
An IRA whose custodian allows assets beyond stocks, bonds, and funds, such as physical metal. A gold IRA is a self-directed IRA holding metal. See Self-Directed Gold IRA for how the account works.
Storage
Segregated storage
The metal is kept apart and identified to one account; the owner gets back the same items.
Commingled (non-segregated) storage
Identical items from many accounts are pooled; the owner gets back equivalent items, not the same ones. It usually costs less.
Home storage
Keeping IRA metal at home. In McNulty v. Commissioner (2021), the Tax Court held that home storage led to taxable distributions. See Home Storage Gold IRA.
What an IRA may hold
Collectible
Under IRC 408(m), buying a collectible with IRA money is treated as a distribution. Most coins and metals are collectibles.
The bullion exception
IRC 408(m)(3) excludes certain U.S. coins and bullion meeting the fineness standards for futures contracts, if the bullion is in the physical possession of the trustee. Whether a coin or bar qualifies turns on those two conditions. See IRA-Eligible Gold.
Fineness
The share of pure metal, written as a decimal such as .995 or .9999. The bullion exception ties eligibility to the fineness standards used for futures contracts.
Proof coin
A coin struck with a special finish for collectors, usually priced far above its metal value.
Numismatic coin
A coin valued for rarity or condition more than for metal content.
Moving money in and out
Trustee-to-trustee transfer
Money moves directly between two IRA custodians and is not reported as a distribution. The money does not pass through the owner’s hands. See Gold IRA Rollover Guide.
Direct rollover
A plan pays an eligible distribution straight to an IRA.
60-day (indirect) rollover
The owner receives the money and has 60 days to deposit it in an IRA. Only one IRA-to-IRA rollover of this kind is allowed in any 12-month period.
In-kind distribution
The IRA distributes the metal itself instead of cash. It is taxed at the metal’s fair market value on the date of distribution and reported on Form 1099-R.
Required minimum distribution (RMD)
The amount a traditional IRA owner must withdraw each year once RMDs begin, at age 73 under current IRS rules. See Gold IRA RMDs and in-kind distributions and Gold IRA Tax Rules.
Form 1099-R
The form a custodian issues to report IRA distributions. An in-kind distribution of metal is reported on it.
Form 5498
The form a custodian files to report IRA contributions, rollovers, and year-end fair market value.
Rules that end an IRA’s tax status
Prohibited transaction
A transaction between the IRA and a disqualified person, such as the owner using IRA assets personally. Under IRC 4975 and IRC 408(e), a prohibited transaction can end the IRA’s tax status.
Disqualified person
The IRA owner, certain family members, and certain related entities, as defined in IRC 4975(e)(2).
Deemed distribution
A transaction the IRS treats as if money had left the IRA, with tax to match.
Related research
- What Is a Gold IRA? — the account structure these terms describe.
- Gold IRA Fees — the cost layers above spot.
- Gold IRA Custodians — the custodian’s role and records.
- IRA-Eligible Gold — the bullion exception applied to coins and bars.
- Gold IRA Rollover Guide — transfers and rollovers in order.
- Gold IRA Tax Rules — distributions, RMDs, and reporting forms.
- Home Storage Gold IRA — the home-storage question and the McNulty holding.
- Self-Directed Gold IRA — what self-direction allows.
Frequently asked questions
What is the difference between spot price and premium over spot?
Spot price is the current market price for immediate delivery of one troy ounce, before any dealer markup. Premium over spot is the amount a dealer charges above that price, stated in dollars or as a percent of spot.
What is the spread in a gold IRA quote?
The spread is the gap between the price a dealer sells at (the ask) and the price it buys back at (the bid) for the same item at the same moment.
Who holds the metal in a gold IRA?
The custodian holds the IRA, keeps its records, and reports to the IRS. The depository is the vault that physically holds the metal. The dealer sells the metal to the IRA and may buy it back; the dealer is not the custodian.
Can a gold IRA hold any coin?
No. Under IRC 408(m), buying a collectible with IRA money is treated as a distribution, and most coins and metals are collectibles. IRC 408(m)(3) excludes certain U.S. coins and bullion meeting the fineness standards for futures contracts, if the bullion is in the physical possession of the trustee.
What did the Tax Court decide about storing IRA gold at home?
In McNulty v. Commissioner (2021), the Tax Court held that keeping IRA metal at home led to taxable distributions.
How many 60-day rollovers are allowed in a year?
Only one IRA-to-IRA rollover of this kind is allowed in any 12-month period. A trustee-to-trustee transfer moves directly between two IRA custodians and is not reported as a distribution.