Can you store gold in a registered account?
Gold is taken into account a professional registered account investment in Canada, Audrey. That means you may hold gold in a registered retirement savings plan (RRSP) or a registered retirement savings fund (RRIF).
However, certain conditions apply to gold and silver coins, bars and certificates. For example, gold coins have to be a minimum of 99.5% pure, while silver coins have to be a minimum of 99.9% pure. Coins must not have any collector’s value, so their market value cannot exceed 110% of the worth of their gold or silver content. In addition, to be eligible, coins have to be purchased directly from a Canadian financial institution or the Royal Canadian Mint.
Gold bars, blocks or wafers are eligible if purchased from a metal refinery accredited by the London Bullion Market Association. The purity requirements are the identical as for coins.
Certificates for gold or silver issued by the Royal Canadian Mint or a financial institution can also be eligible if the valuable metal represented meets the above conditions.
Other ways to speculate in gold in Canada
There are other ways to carry the asset, Audrey, than owning physical gold. SPDR Gold Shares (NYSEArca ticker symbol: GLD) is the world’s largest physically-backed gold exchange-traded fund (ETF). It owns gold bullion and investors can easily buy and sell the ETF of their registered accounts. It’s very liquid in case you’ll want to sell it quickly.
There are mutual funds that own gold bullion and gold stocks, although more common are precious metals funds that provide exposure to numerous precious metals, with gold being the primary one. And in fact, you may spend money on gold by buying company stocks, resembling those of small exploration corporations or large global gold producers, with high to low risk levels.
Diversification is healthier than a single investment
I’d, Audrey, are inclined to allocate at most a small amount of gold to your RRIF account. That doesn’t reflect my opinion on gold and my opinion on what might occur next with gold prices – frankly, that will be pure speculation. My answer can be the identical for some other commodity, stock, and even stock sector. Diversification is the one “free lunch” in investing, meaning should you are on the lookout for something protected – which is a component of your query about gold – it’s best to try to construct a diversified portfolio.
If I were you, I would not invest greater than 5% in any single stock and not more than 10% in gold, but it’s best to check with your advisor or rigorously consider what’s best for you.
