How to write a personal precious metals purchase policy

What to take away

A purchase policy is one page written while nothing is pressing. It cannot remove market risk or replace advice from a licensed financial, legal or tax professional. It can stop a phone call or a headline from rewriting your plan at the checkout screen.

Keep it short enough to actually read before you pay.

Start with the purpose

Finish this sentence: "I am considering physical precious metals because..."

Real answers include a small first coin to learn with, a tangible asset held outside a brokerage, a defined gift, or a limited physical slice of a wider plan. "Prices only go up" is not a purpose.

Write down your holding period, the events that would force you to sell, and the loss you could absorb without touching rent or groceries. If near-term bills depend on this money, talk to a licensed financial professional first.

Set a hard spending cap

Pick a maximum dollar amount and, if it applies, a maximum share of investable assets. The cap counts premiums, shipping, insurance, storage and tax. It should.

Add a no-borrowing rule unless a licensed independent professional has reviewed that specific arrangement. A loan adds interest, margin calls and forced selling to a purchase that was supposed to be simple.

A rising quote is not a reason to raise the cap. Review the cap on a schedule, against your whole financial position.

Write down the assets, debts and near-term obligations the cap has to respect. Metal-only math hides the cost of tying up cash you may need elsewhere.

Decide now what happens when an order exceeds the cap. The answer is a delayed review, not splitting one purchase across two invoices or two cards to stay under a limit.

Investor.gov's guide to asset allocation, diversification, and rebalancing notes that allocation depends on time horizon and risk tolerance, and that diversification works across and within asset categories. One metal is not a diversified plan.

List eligible products

Name the metals, the forms, the minimum fineness and the largest single unit you will buy. A simple list might allow widely traded bullion coins and bars from named mints and refiners, while excluding rare coins, novelty items, jewelry and unallocated accounts. For example, you could name U.S. Mint American Silver Eagles (.999 fine silver), Royal Canadian Mint Silver Maple Leafs (.9999 fine silver) and Canadian Gold Maple Leafs (.9999 fine gold). Set minimums by metal and form, and list any exceptions by coin program: American Gold Eagles are .9167 fine.

Bigger bars usually carry a lower premium per ounce and are harder to divide when you sell. Smaller coins cost more to make and sell more easily in pieces. Set the unit range around how you expect to exit.

If a retirement account is involved, say so and check the rule before writing the product list. The IRS page on collectibles in individually directed plan accounts states that a participant whose account acquires a collectible is treated as receiving a distribution that year.

Certain coins described in 31 U.S.C. 5112, coins issued under state law, and bullion of a stated fineness held by a bank or approved non-bank trustee fall outside that collectible definition. A product list that never names the account type is unfinished.

Require a written quote

Ask for these fields in writing before you send money:

Set a maximum premium only after you price the exact product. One percentage will not fit a one-ounce silver round, a kilo gold bar and a shortage week.

Screen the seller

Require a legal business name, a physical address, written terms and a contact route you can verify. Search for complaints independently. Check any registration your state requires, and confirm with your state regulator or the CFTC and FTC where a complaint belongs.

An authorized distributor relationship is not a government guarantee of every dealer downstream.

Reject cold calls, home visits, secret opportunities, guaranteed returns, and deadlines. Also reject refusal to send documents, payment to an individual, crypto-only demands, and last-minute substitutions.

Control payment and delivery

List the payment methods you allow and the limit on each. Know which ones reverse, which carry fraud protection, how long they take, and what identity documents the seller will ask for. Confirm wire instructions through a phone number you already had, never one from the email.

Require tracked, insured shipping, a signature rule, and a plan for the day you are not home. Photograph the package before you open it and while you open it. For local pickup, pick a safe meeting place and inspect the product before you sign.

Choose custody before you buy

Name the storage type without writing its address or combination into the policy. Record who insures it, who can access it, the backup key or succession method, and how you would move the metal.

If a third party holds it, get written answers on several points.

Keep records and review

For each purchase, keep the invoice, payment record, seller identity and product specification. Also keep the serial number, assay card, photographs, delivery receipt, any test results, storage code and fees. Keep one protected copy away from the metal.

Review the policy once a year and after a change in income, liquidity, law, storage, insurance, health or household access. Do not rewrite it just because the price moved.

One-page policy template

Common questions

Is a purchase policy a recommendation to buy?

No. It is a decision-control document, and the correct result may be not to buy. It sets the terms in advance so a salesperson is not setting them for you.

Should the policy name a target allocation?

Only after you look at your whole financial position, ideally with a licensed independent professional. A percentage picked in isolation ignores your debts, income and time horizon.

Can the policy allow collectible coins?

Yes, but treat numismatic knowledge, grading, provenance, premiums and resale as separate requirements. A collectible purchase is a different decision from a bullion purchase, and the policy should say so.

What should trigger an immediate pause?

Unsolicited contact, urgency, guaranteed profit, borrowed money: