Gold has had a rough few months.

After reaching an all-time high of $5,500 per ounce in January 2026, gold prices have fallen roughly 20% to around $4,160 by late July. What makes the decline unusual is that it occurred during a period of heightened geopolitical conflict, a time when gold has historically performed well as a safe-haven asset.

As I told Moneywise and MSN recently, that does not change how I think about gold as a long-term retirement investment. I continue to like holding physical gold in a Self-Directed IRA or Solo 401(k), where the focus is on building wealth over decades, not days.

The key question for retirement investors is not simply whether you should own gold. The better question is: what is the most tax-efficient way to own it?

Why Has Gold Fallen?

Normally, geopolitical uncertainty pushes gold higher. Instead, gold has sold off. The reason comes down to interest rates.

As the Iran conflict heated up, oil prices rose, triggering higher inflation, which forced the Federal Reserve to keep interest rates elevated. Gold produces no income or yield, so when T-bills pay over 4%, a significant amount of cash moves there instead. Higher real interest rates reduce the appeal of holding an asset that generates no return.

There has also been some institutional selling. Turkey confirmed significant gold sales during the first half of the year, which created additional price pressure. But as David Han, founder of AIStockWire.com, noted in a recent Moneywise article, the selling reports were blown out of proportion. Newer tracking data shows central banks returning to buying approximately 50 tons per month, consistent with a decade-long strategy of reducing dependence on the U.S. dollar.

None of these developments change gold’s long-term role in a diversified portfolio.

Gold Is Still Outperforming Over the Past Year

Even after the correction, gold remains up approximately 20% over the past 12 months, slightly outpacing the S&P 500 over the same period. Gold has more than doubled over the last five years and has generated roughly 12% annualized returns over the last decade, despite periods of significant volatility.

That does not mean gold is a better investment than stocks. It means that markets move in cycles. Sometimes stocks lead. Sometimes real estate leads. Sometimes gold quietly outperforms while investors are focused elsewhere. This is exactly why diversification works.

Why Central Banks Continue Buying Gold

One point worth paying close attention to is that global central banks continue purchasing gold at a significant pace. Since Russia’s invasion of Ukraine, many countries have accelerated efforts to diversify reserves away from the U.S. dollar. Gold-buying countries have spent a decade reducing dollar dependence, and as Han noted, when the price drops they tend to buy more rather than sell.

Central banks understand something individual investors sometimes forget: gold has no counterparty risk. It cannot be printed, cannot default, and cannot go bankrupt. It has been recognized as a store of value for thousands of years. If central banks continue viewing gold as an important reserve asset, individual retirement investors should probably pay attention.

Gold Is Not Meant to Replace Stocks

Whenever I discuss gold, people assume I am telling investors to sell all their stocks. I am not.

Over long periods, equities have historically produced outstanding returns. But concentration creates risk. Today, much of the stock market’s performance is being driven by a relatively small number of large technology and AI companies. If that leadership changes, many investors may discover their portfolios were not as diversified as they believed.

Historically, financial advisors recommend keeping 5% to 10% of a portfolio in gold as a hedge. Depending on someone’s overall portfolio and risk tolerance, I could see a modestly higher allocation making sense today. The goal is not maximizing returns every single year. The goal is improving risk-adjusted returns over decades.

Why a Self-Directed IRA Is the Best Way to Own Gold

If you are going to own physical gold, why not own it inside one of the most tax-advantaged accounts available?

A Self-Directed IRA follows the same IRS contribution and distribution rules as any other IRA. The difference is investment flexibility. Instead of being limited to mutual funds and ETFs, a Self-Directed IRA allows you to purchase IRS-approved physical precious metals through a qualified custodian.

In a Traditional Self-Directed IRA: gains compound tax-deferred and no annual taxes are due while the investment remains in the account.

In a Roth Self-Directed IRA: appreciation can potentially be completely tax-free, and qualified Roth distributions are tax-free once the Roth rules are satisfied.

Suppose your gold doubles over the next decade. If you own it personally, selling generally triggers capital gains tax. Inside a Roth Self-Directed IRA, that same gain may be withdrawn completely tax-free. That advantage becomes increasingly powerful over long holding periods.

Physical Gold vs. Gold ETFs

Many investors buy gold ETFs. There is nothing inherently wrong with that approach, but there are meaningful differences. With physical gold inside a Self-Directed IRA, your account owns actual bullion stored at an IRS-approved depository. You eliminate many of the risks associated with owning shares of a financial product that merely tracks gold prices. For investors who want direct ownership, physical gold offers a different level of certainty.

IRS Rules Every Investor Should Know

Many people mistakenly believe they can buy gold through their IRA and store it at home. They cannot. The Internal Revenue Code requires IRA-owned precious metals to be held by an approved U.S. trustee or qualified depository. Attempting home storage can trigger a prohibited transaction or be treated as a taxable distribution, potentially resulting in significant taxes and penalties.

The IRS also permits only certain precious metals that meet strict purity standards, generally including qualifying gold, silver, platinum, and palladium. Not every coin qualifies. Collectible coins generally do not. Working with an experienced Self-Directed IRA provider helps avoid these costly mistakes.

Read more: Can You Hold a Precious Metals IRA Without a Depository? What the IRS Actually Says.

Gold Should Be Part of a Bigger Strategy

I never encourage clients to build a retirement strategy around a single investment. Instead, I encourage them to build around flexibility. A Self-Directed IRA allows investors to hold multiple alternative assets inside one retirement account, including real estate, private businesses, private credit, cryptocurrency, private equity, and IRS-approved precious metals. That combination is what makes the Self-Directed IRA so valuable.

Should Investors Buy the Dip?

No one can predict short-term commodity prices with certainty. But history teaches a few important lessons. Markets overreact. Investors chase performance. Corrections often create opportunity.

As I noted to Moneywise, too many investors spend their time trying to call the exact bottom, and that is a losing game. A better approach is to buy gradually and let time do the work. The most successful retirement investors I have worked with think in decades, not quarters. They do not chase headlines or try to time every market move.

If your long-term investment plan includes a modest allocation to gold, today’s lower prices may represent a more attractive entry point than six months ago. That does not guarantee higher prices. It simply means you are purchasing after a significant correction rather than after a major rally, which is generally a healthier way to invest.

Final Thoughts

The recent decline in gold prices has caused some investors to question whether gold still deserves a place in their portfolio. I believe the answer is yes. The reasons for owning gold have not changed: geopolitical uncertainty, inflation protection, diversification, portfolio risk management, and long-term wealth preservation. In many ways, today’s pullback simply makes those benefits available at a lower price than earlier this year.

But perhaps the biggest opportunity is not simply buying gold. It is buying gold tax efficiently. A Self-Directed IRA allows investors to combine the long-term stability of physical precious metals with the powerful tax advantages Congress has provided for retirement savings. If you want to understand how to add gold or other precious metals to your retirement strategy, IRA Financial’s team of in-house specialists is available for a free consultation.