Should you hold gold in a RRIF? – MoneySense

Can you hold gold in a registered account?

Gold is considered a qualified investment for registered accounts in Canada, Audrey. This means you can hold gold in a registered retirement savings plan (RRSP) or registered retirement income fund (RRIF).

However, gold and silver bullion coins, bars and certificates are subject to conditions. For example, gold coins must be at least 99.5% pure, while silver coins must be at least 99.9% pure. Coins cannot have a collectible value, so the fair market value cannot exceed 110% of the value of its gold or silver content. To be eligible, coins must also be purchased directly from a Canadian financial institution or the Royal Canadian Mint.

Bullion bars, ingots or wafers qualify, if they are purchased from a metal refiner accredited by the London Bullion Market Association. The purity requirements are the same as coins.

Certificates for gold or silver issued by the Royal Canadian Mint or a financial institution can also qualify, if the bullion represented satisfies the above conditions.

More ways to invest in gold in Canada

There are other ways to hold the asset, Audrey, beyond owning physical gold. SPDR Gold Shares (NYSEArca ticker symbol: GLD) is the world’s biggest physically backed gold exchange-traded fund (ETF). It owns gold bullions, and investors can easily buy and sell the ETF in their registered accounts. It is very liquid, should you need to sell it quickly.

There are mutual funds that own gold bullion and gold stocks, although it is more common to find precious metals funds that provide exposure to various precious metals, gold being the primary one. And of course, you can invest in gold by buying company stocks, such as those of small exploration companies or major global gold producers, with high to low risk levels.

Diversification is better than any one investment

My inclination, Audrey, would be to allocate, at most, a small amount of gold to your RRIF account. That is not a reflection of my view on gold and what I think might happen next to gold prices—frankly, I would be speculating. My answer would be the same for any other commodity, stock or even stock sector. Diversification is the only “free lunch” in investing, meaning if you are looking for something safe—which is part of your question about gold—you should aim to build a diversified portfolio.

If I were you, I would allocate no more than 5% to an individual stock and no more than 10% to gold. But you should talk to your advisor or do your due diligence to decide what works best for you.