Why are metals taxed as collectibles?
The tax code lumps physical gold, silver, platinum, and palladium in with art and antiques: gains on collectibles held longer than a year are taxed at your ordinary rate up to a 28% cap, rather than the lower rates that apply to stocks and bonds.
Short-term gains, metal held a year or less, are taxed as ordinary income regardless, same as any other asset.
How does an IRA change the tax picture?
Inside an IRA, the collectibles rate disappears. A traditional IRA's gains are taxed as ordinary income when distributed; a Roth IRA's qualified distributions come out tax-free. The metals sit in the account as an asset like any other.
This is one of the genuine structural arguments for holding metals in a retirement account rather than a home safe, the tax treatment, not just the custody, is different.
How does the collectibles rate show up in practice?
If you sell personally held metal at a profit after a year, expect to report the gain at the collectibles rate on your return. Keep purchase records, your cost basis is what you paid including premiums, and premiums are not small in this market.
Tax situations vary; confirm specifics with a tax professional before a large sale.