How do gold IRA companies actually make money?
Almost entirely on the spread, the gap between what they pay for metal and what they charge you for it. Setup and administration fees are small and visible; the spread is large and invisible. That is why two firms can advertise the same fee schedule and one of them costs thousands of dollars more on the same order.
This is the part of the industry nobody writes down for buyers, so here it is plainly. A dealer buys bullion at a wholesale price tied to the live spot market and sells it to you at a retail price. The difference is the dealer’s margin. On ordinary bullion, that margin is thin and competitive, because you can price the same coin at five other firms in ten minutes.
The margin stops being comparable the moment the product stops being ordinary. A proof coin, an exclusive release, a commemorative issue struck for a single distributor, none of these have a public reference price. That is not an accident of the market. It is the point. Once the item cannot be priced against spot in one search, the markup becomes whatever the sales conversation can support.
Everything else you will be shown, the fee schedule, the promotional metal, the ranking badge, is a distraction from that one number. Our fee comparison guide covers the visible charges in full; this page is about the invisible one.
Are “best gold IRA company” lists real?
Most are paid affiliate placements. The site earns a commission for each funded account it refers, and dealers pay different rates, so the order of the list tracks commission size rather than customer outcomes. The listings are advertising with the appearance of research.
Search any variation of “best gold IRA company” and the first page is almost entirely review sites, ranking sites and comparison tables. Read the footer of each one. You will usually find a disclosure explaining that the operator may be compensated by the companies listed. That disclosure is the whole story.
None of this means a listed firm is dishonest. Good dealers advertise too. It means the ranking contains no information about the only thing that determines what the account costs you, because nobody ranking these firms has priced an identical coin at each of them on the same afternoon.
Dormy is a dealer. We are telling you to verify us the same way, and the rest of this page is the method.
What is the spread, and what does it cost you?
The spread is the difference between the price you pay for an item today and the price the same dealer would pay you for it back today. It is the true cost of the transaction, it is charged once at purchase, and it determines how far the metal price must rise before you are even.
Ask a dealer what they would pay you today for the coin they are selling you today. The two numbers together tell you everything. A narrow gap means competitive bullion pricing. A wide gap means the product carries a markup you will have to grow out of before you see a gain, no matter what gold does.
The arithmetic below is illustrative, round figures chosen to show how the mechanism behaves, not quoted rates. It assumes the metal price itself does not move at all.
| Spread at purchase | Value if sold back immediately | Gold must rise by | Character of the product |
|---|---|---|---|
| 5% | $95,000 | About 5.3% | Competitive standard bullion |
| 10% | $90,000 | About 11% | Wide but visible bullion premium |
| 20% | $80,000 | About 25% | Typically a branded or exclusive item |
| 35% | $65,000 | About 54% | Typically proof or commemorative |
Why a 10% spread does not mean gold only has to rise 10% to break even
The recovery percentage is calculated from the lower value you are left with, not from the original $100,000.
Recovery % = (Amount needed to recover) ÷ (Current value)
- $90,000 → $100,000: needs a $10,000 gain. $10,000 ÷ $90,000 = 11.1%.
- $80,000 → $100,000: needs a $20,000 gain. $20,000 ÷ $80,000 = 25%.
- $65,000 → $100,000: needs a $35,000 gain. $35,000 ÷ $65,000 = 53.8%.
A 20% markup leaves you with $80,000, so the gain is measured against $80,000, not $100,000. That is why the recovery number is always larger than the spread itself.
That last row is not hypothetical scaremongering. It is the ordinary consequence of buying numismatic product inside a retirement account, and it is the single most expensive mistake made in this industry. The buyer usually never learns it happened, because they only discover the buyback price years later.
What six questions should you ask before funding?
What exactly am I buying, by item and weight? What is the total delivered cost? What would you pay me for these same items today? Who is the custodian and what is their full fee schedule? Which depository, and what is the annual storage cost? Is anything here a proof, exclusive or commemorative product? Ask for written answers.
Send them by email, in that order, before any money moves. The request itself is the test. A firm that answers all six in writing within a day is a firm that expects to be compared. A firm that answers four of them and steers you back to a phone call has told you which two it cannot answer.
Then do it three times, at three firms, on the same day, for the same item and quantity. Metal prices move continuously, so quotes taken a week apart are not comparable and a dealer can always explain a difference away with market movement. Same-day quotes remove that explanation entirely, and reading each quote line by line shows exactly where the totals differ.
| Question | A serious firm | A firm to walk away from |
|---|---|---|
| What am I buying? | Named item, weight, purity, quantity, in writing | “A gold portfolio” or a package name |
| Total delivered cost? | A single figure including all charges | A range, or “depends on the market” |
| Your buyback today? | A figure quoted without hesitation | Deflection, or buyback “depends” |
| Who is the custodian? | Named firm and full fee schedule | “We handle all of that for you” |
| Which depository? | Named facility and annual storage cost | Vague reference to “secure storage” |
| Any proof or exclusive items? | A straight yes or no, with premiums shown | Explanation of why rare coins are better |
What are the warning signs of a bad gold IRA company?
Refusal to quote a buyback price, prices given as ranges, urgency built around a deadline or promotion, confiscation and crisis narratives used as sales arguments, free-metal offers, reluctance to name the custodian or depository, and any suggestion that IRA metal can be stored at home.
The crisis narrative deserves its own paragraph, because it is the oldest device in this business. A salesperson describes confiscation, a currency collapse or a closing policy window, and the emotional pressure does the work that a competitive price cannot. Metal is worth owning for unexciting reasons. Anyone who needs fear to sell it is compensating for the price. The full list of gold IRA scam red flags pairs each tactic with the question that exposes it.
Free silver promotions work the same way from the other direction. The promotional metal is real; it is simply paid for out of a wider spread on the gold you are buying. Compare the total delivered dollar cost per ounce against a plain quote elsewhere and the promotion usually turns out to be the most expensive way to receive something free.
Home storage claims are the clearest line of all, because they are not a pricing question but a legal one. Metal in an IRA must be in the possession of a bank or approved trustee, as covered in the storage guide. Any firm suggesting otherwise is either uninformed or willing to put your account at risk to make a sale.
Should the same company handle everything?
No, and no company legitimately can. The custodian administers the account, the depository holds the metal, and the dealer supplies it. A firm presenting all three as one service is arranging the other two on your behalf, and you are entitled to know who they are and what each one charges.
The convenience framing is not itself dishonest, arranging the custodian and depository is a normal service, and most buyers want the help. The problem is when the three parties are described as one so that three separate fee schedules can be presented as a single figure, or worse, not presented at all.
Ask for the custodian by name and go read their published fee schedule yourself. It takes two minutes and it is the fastest way to learn whether the number you were quoted matches the number the custodian actually charges.
How do you check a dealer’s record?
Read Better Business Bureau complaint detail rather than the letter grade, search your state attorney general’s consumer protection filings, and check Commodity Futures Trading Commission and Federal Trade Commission enforcement announcements, which name firms in precious-metals cases. Weigh pricing complaints far above service ones.
Letter grades and star averages are close to meaningless here, because a firm with a large marketing budget generates a large volume of positive reviews. The complaint text is where the information is. Look specifically for the pattern where a customer describes discovering the buyback value years after the purchase, that single complaint type tells you more than a hundred five-star reviews.
Enforcement records matter more still. Federal actions in this sector are usually about exactly the mechanism described on this page: elderly buyers steered from ordinary bullion into overpriced collectible coins inside retirement accounts.
Where can you verify this yourself?
The SEC investor alert on self-directed IRAs and the FINRA insight on buying physical metals both describe these sales practices directly. The CFTC publishes fraud advisories on precious-metals schemes, and the IRS sets out what an IRA may hold. None of those are dealer sources, including this one.
Start with the SEC investor alert on self-directed IRAs, which is explicit that a custodian holding an asset does not mean anyone has verified its value. Then read the FINRA insight on buying physical gold or other metals, which covers markups and buyback pricing in plain language.
The CFTC advisory on precious-metals fraud describes the pressure tactics, and the IRS page on collectibles in individually directed accounts settles what an account may legally hold and who must hold it.
Rules and figures change. Confirm anything time-sensitive against the agency source rather than a dealer page, this one included.