Managing Inflation Risk With a Gold and Silver IRA

by Grant HEnson

*The owners of this website may be paid to recommend some precious metals companies. The content on this website, including any positive reviews of these companies and other reviews, may not be neutral or independent.

Seeing the global economy at the edge of another major recession does not inspire confidence in the future to come. Most people are worried about their future and rightfully so. But, while we cannot do much to improve the economic situation as a whole, we can secure our own future with an Individual Retirement Fund, otherwise known as an IRA.

More specifically, we’re talking about a precious metal IRA that utilizes gold and/or silver. Sure, you can create a currency-based IRA, but then you won’t have any protection against inflation. By the time you retire, your IRA would be worth much less than it should.

Fortunately, gold and silver IRAs are the perfect solution to this conundrum. Keep reading to learn more!

Understanding Inflation and Its Effects on Retirement Savings

Inflation is the gradual increase in the general price level of goods and services, leading to a decrease in the purchasing power of money.

The best way we can explain inflation is with the principle of supply and demand. When the supply of something goes up, its value goes down. 

The same happens with money. As the treasury issues more currency, the value of all the money that already exists goes down — leading to increased prices. This decrease isn’t negligible either. For example, a dollar today has the same purchasing power as 55 cents from the year 2000. 

Impact of inflation on retirement funds

As the value of money erodes, so does the value of cash-based retirement funds like treasury bonds. Plus, the increase in the cost of living makes the issue even worse. You might think that you need about 500,000 USD to retire peacefully. But, would the same be true two decades from now? Unlikely.

Gold and Silver IRAs as a Hedge Against Inflation

This is why we recommend IRAs based on gold and silver as effective counters against inflation. 

Both of these precious metals are referred to as safe-haven assets that investors rely on to protect their wealth during recessions and high inflation. In simple terms, when the value of money goes down, the prices of these metals increase to negate any losses you might have incurred. 

Let’s take a look at some historical performance data to back our point.

Historical examples

The most notable example of very high inflation in recent times is the 2008 financial crisis. During this time, almost all assets were in a downward spiral and inflation was running rampant. Yet, despite such hard market conditions, gold firmly held its value. Not only that, but its price actually increased from 800 USD to 920 USD between January 2008 and 2009.

We also witnessed a similar trend with silver as both of these metals share the same reputation as “safe haven” assets. 

Setting Up a Gold and Silver IRA

Setting up a gold and silver IRA is not a difficult task. If you’re interested, here’s a summarized version of the whole process and the accompanying regulations we created to help you out.

Setting up the IRA

In our experience, there are three key steps involved in setting up a precious metal IRA. These include:

Choosing the type

You can work with an IRA company to store your purchased gold or silver in a secure facility. Or you can take possession of the metals and set up something known as a self-directed IRA. 

Choosing a dealer

The next step is to choose a dealer for the precious metals. We suggest looking for a reputable seller with a good track record and market-competitive prices to ensure maximum profits. Here is our list of the best precious metal companies in 2024.

Funding the account

Purchase the initial amounts of gold and silver, and dedicate them to your IRA funds. Also, while you can hold on to the metal in a self-directed IRA, we recommend availing the services of a precious metal storage company.

Regulations regarding gold and silver IRAs

As far as we’re aware, there are only two key regulations that you have to follow.

First, the metal you buy should have a high purity rating to meet the IRS requirements; 99.5% for gold and 99.9% for silver.

Secondly, these metals should be in bullion form (coins, bars, and ingots). So, items like gold jewelry would not qualify for an IRA regardless of its purity levels.

Diversification within a Gold and Silver IRA

Do not, we repeat, do not invest all of your IRA money into a single metal and call it a day.

For starters, you’re increasing the risk of losing everything if the price of that metal crashes due to an unforeseen event. Additionally, you’re also crushing the passive growth potential of your IRA. 

Here’s what you should do:

Balance gold and silver

Spread your IRA investment between gold and silver to minimize risk. You can choose the exact ratio of the two based on your personal research and preferences. Here is a guide on how much you should allocate to gold vs silver. You can also opt for other precious metals such as palladium and platinum.

Mix with other assets

Adding assets like mutual funds to the mix not only reduces risk but also increases the potential for growth in the future. 

Risks and Considerations

Before you finalize your decision on gold and silver IRAs, here are a few risks we’d like you to consider:

Slow growth

From what we’ve seen, gold and silver do not experience the explosive growth of assets like stocks and cryptocurrencies. So if your goal with the IRA is profit generation, precious metals might not be the right fit for you. 

Storage costs

If you want to secure your metals with a top storage company, you will have to pay yearly fees that can cut into your funds.

Price volatility

While they’re not as volatile as stocks or crypto, the price of these metals is not a straight line. Make sure you’re paying attention to the market and not buying at a peak, to avoid heavy losses.

Maintaining and Adjusting Your Gold and Silver IRA

Remember that the IRA is not static. You can always change its contents, rebalance the amounts of each metal, add new assets, or even change course entirely.

We suggest monitoring your IRA on a regular basis and keeping it up to date with the latest trends in the market. For example, if gold is experiencing a temporary dip, increasing the amount in your IRA would be a wise decision. 


As we’ve seen, gold and silver provide near-flawless protection against inflation, as well as recessions. This makes them the ideal IRA choices for folks who are after stability and peace of mind. That said, we still advise you to do your own research before purchasing gold, silver, or any other asset for that matter. If you have decided to invest in gold or silver, you may find this article useful, where we discuss the top precious metal companies to help you start a gold or silver IRA.

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