What you do with the proceeds of a 401(k) loan is nobody's business except yours, but your employer will
have guidelines about the acceptable uses for the borrowed funds. If you tell them you are going to purchase physical precious metals with the money, they will most likely say, "no". As an alternative, you can simply say that you have other investment opportunities to pursue.
Before going down the 401(k) loan path consult with your financial planner, investment advisor, and tax accountant. These professionals will
be able to make recommendations based
on your unique circumstances and tolerance for risk.