The Top 7 Mistakes To Avoid When Investing in a Gold IRA

Gold-funded IRAs can be an excellent tool for hedging against inflation and protecting your hard-earned savings, but it also pays to use them wisely. Are you interested in opening a gold individual retirement account? If so, you’ll want to know about a few common pitfalls.

Below, our expert gold IRA team at Oxford Gold Group shares seven mistakes to avoid when investing in a gold IRA so you can focus on preserving your wealth and legacy.

#1 A Lack of Understanding About Gold IRAs

man focus on learning about gold ira

A single internet search will not provide enough information on gold IRA investing to help you make informed decisions about whether to put your hard-earned money into it. All asset classes, including precious metals, require in-depth market knowledge to make successful investment decisions that will pay dividends in the future.

So, what do you need to know before investing in a gold IRA?

  • Research the gold market and its history.
  • Learn about how gold retains its value.
  • Ensure you understand the tax implications of opening an IRA.

Research the Market So That You Recognize Those “Golden” Opportunities

Of all global assets, gold offers one of the longest and richest market histories. You have lots of data to work with when making your investment decisions because traders created the first gold coins in 550 BC!

When researching the modern gold market, consider factors like the following:

  • How much value does gold gain on average per year?
  • Is gold currently trending up or down?
  • What influences gold’s pricing?
  • How did gold perform during past periods with similar economic or political conditions?

For example, between 1971 and 2022, gold had an average gain of 7.78%. However, during these years, the precious metal’s value fluctuated quite a few times. In 2022, the annual return of gold was just 0.4% due to numerous economic factors, whereas 2020’s annual return was almost 25%.

Learn About Numismatic Value So That You Know How to Buy and Sell Gold Wisely

New investors often see high-price-point gold products and assume they’re good investment tools, but value isn’t only about price. Gold products gain value from two sources:

  • The level of gold purity
  • The product’s rarity

Numismatic coins (collector’s coins) directly increase their potential market value with a limited supply or rarity factor. That’s why investing in gold coins requires a whole other level of market knowledge. The asset you buy will not directly gain value with the price of spot gold, and you’ll want to measure its worth in other proven ways.

Additionally, you typically cannot fund an IRA with numismatic products. The IRS has purity requirements you must meet, which are easier to find in mainstream gold products. IRS-approved precious metals from dealers like Oxford Gold Group should give you a good idea of what you’re looking for in a tax-compliant asset.

Understand the Tax Implications of Gold Investing So That You’re Well-Prepared

Another of the common mistakes to avoid when investing in a gold IRA is ignoring the tax implications altogether. However, if you’d like to avoid tax penalties or account disqualifications, the following aspects are crucial:

  • Contribution limits
  • Precious metal guidelines
  • Withdrawal rules

There are tax advantages that come with an IRA, but you’ll have to take some time to read the fine print to ensure you don’t miss out.

#2 Choosing the Wrong Gold IRA Custodian

red x mark on wooden cube

Your IRA custodian will manage your precious metals investment, safeguard your assets, and ensure you stay up-to-date on all IRS requirements. So, choosing the right custodian can make or break your gold investment journey.

Consider the following factors before finalizing your preferred custodian’s services:


The most trustworthy custodians provide upfront transparency on all fees and regulations. If you cannot find this information without jumping through hoops, expect hidden fees and other surprises down the line.


Custodians charge fees for numerous aspects of the IRA process. While you cannot avoid paying fees altogether, you should compare costs to find the most affordable option for your financial goals. For example, some of the common fees you may need to pay include the following:

  • A one-time setup fee
  • Account rollover or transfer costs
  • Annual account maintenance fees
  • Annual storage fees
  • Annual insurance costs

Customer Reviews and Reputation

Customer reviews speak volumes about how much you can trust a gold custodian. What do people say about your potential custodian across platforms? What are the company’s certifications?

You should also check that the custodian adheres to IRS regulations so that you don’t inadvertently purchase non-approved precious metals for your IRA.

#3 Buying Gold as a Short-Term Investment

golden sand inside transparent hourglass

Gold typically works best as a long-term investment. While the precious metal isn’t prone to extreme volatility when compared to higher-risk assets, the stability also means it won’t provide enormous gains over short periods. And that’s the point.

The primary investment purpose of gold is to store value over time. It can gradually appreciate while other asset classes suffer losses with economic downturns. If you want an asset that can offer immediate gains, choose something riskier (but expect huge IRS penalties on huge IRA returns).

#4 Not Considering Fees and Premium Charges on Gold

IRA custodians charge multiple fees that you should consider before creating your account. You will need to budget for these costs in advance, paying these annual fees for as long as you have the account.

Gold dealers also typically charge premiums on bullion (the price you pay over and above the spot price of gold). High premiums could mean a less fair deal, so check the details carefully before you buy anything.

#5 Buying Gold When the Price Is High

dollar banknote with gold bars on top

One of the most common mistakes to avoid when investing in a gold IRA is buying when the market is up. It’s intuitive to see gold performing well and want to get in on the action, but some restraint could go a long way.

Buying when prices are high will make it harder to see solid returns when you’re ready to sell. Buying in a bearish market works better if you want ideal opportunities for price growth.

#6 Choosing the Wrong Type of Gold IRA

Numerous types of individual retirement accounts exist, including the following and more:

Each investment structure provides varying tax advantages, rules, and restrictions. The right type of gold IRA will match your personal financial goals, tax preferences, and investment plans.

#7 Investing Too Much in Precious Metals

Novice traders may assume they should place all of their funds into a single asset, but putting your eggs into one basket, so to speak, brings on unnecessary risks, even in gold investing. Diversifying your portfolio is safer.

Portfolio diversification is a common investment strategy, allocating different portions of your portfolio across numerous assets. For example, you could invest 20% of your retirement funds in gold, 50% in real estate, 10% in stocks, and 20% in government bonds. If one asset class fails, you’ll still have some security.

Diversify Your Portfolio: Explore a Gold IRA

Now that you know the common mistakes to avoid when investing in a gold IRA, you can look into transparent and secure gold IRAs that help you reach your long-term financial goals. Try Oxford Gold Group at (833) 600-GOLD to learn more.

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Learn How A Precious Metals IRA Can Secure Your Retirement

The precious metals market may seem intimidating, but it’s not as it seems. Our team has compiled a summary of our tips and information into a free guide so you can learn how to begin securing your future.


We Will Guide You Every Step Of The Way


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