Tax consequences for gold/silver arise only upon sale or deemed disposition. Once sold, the income may be business income or capital gain depending on the facts. IT- 459 discusses the factors that indicate whether a transaction is a capital or income transaction.
For instance, if an individual buys and sells gold regularly, then it will be treated as an income transaction. In contrast, if the sale is done once or very infrequently, it may be treated as a capital transaction. There are many other factors that need to be considered, as indicated on IT-459, to determine whether the transaction is a capital or income transaction.
