Most of us struggle, on a consistent basis, with gift-giving. We struggle with gift-giving for many reasons. Principally, finding things that people need or at least want, in a reasonable price range, can be hard. So how did this tradition start? When we looked at why do we give gifts at Christmas, we stumbled on some interesting facts.
Among these was that gifts are economic signals that play an important part in societies, e.g. organizing social relationships. Being in precious metals, we asked is Gold a good gift? What about silver? How do these stack up against flowers or chocolates?
To start with, we need to think about gift giving. What makes a really great gift? Psychological evidence suggests something strange. According to Galak et al. we too often focus on the receipts reaction at the moment of receiving the gift.
However, what the recipient really cares about it is how useful that gift is when they own it. So yes, gift giving means picking something for our loved ones. But it requires going beyond something that will excite them towards something they can really benefit from.
Does that make gifting even harder? Ultimately, this leads us to ask is Gold a good gift, and when? At this point we are stuck between two principles. First, gifts have a timeless social value. As Ana Swanson argues, gifts are often meant for consumption rather than investment. On the other hand, people call that position out as silly.
These people describe strictly consumption-based gifts an economically sub-optimal. Instead, the gift should be long-term useful for the person receiving it.
One way to see Gold is as an alternative to cash. But why not just give cash? Well, that breaks rule one, i.e. you do not really consume that cash. Rather, it adds to your wealth and allows you to consume more. Another interpretation of this principle is that cash shows less thoughtfulness. There are some traditional exceptions such as weddings where it is explicit that the couple is saving for a future purchase, e.g. a downpayment on a home.
Gold presents us with an alternative. And likewise does silver. In effect, you are giving someone something that can be traded in for their choice benefit. With that in mind, you show thoughtfulness and are likely giving them something they did not previously have. Still, you have not entirely escaped that Gold will not disappear once consumed.
Some people, however, may see this as a strong benefit. They would answer when is Gold a good gift compared to cash with those times you want to give future economic benefit, show thoughtfulness, and not have it immediately burned though.
As it happens, buying precious metals (especially for newer investors) can be an exciting challenge. If on the way to a last-minute shopping frenzy and decide you want to gift a Gold bar, you may be upset with the price tag. So a lot of people see silver as a more sensible alternative. We explore some of these reasons while looking at answers to how much silver you should someone own. The main benefit of silver is that you get a much more meaningful amount for your buck. For example, at the time of writing, you can buy a 10 oz silver bar for much less than the price of a 1/4 oz. gold coin.
What about jewellery? Well, gold jewellery is not a good investment. Since you are paying such a premium over the precious metals content, the gift will be worth much less on resale. With that in mind, jewellery can make a great gift if someone is looking for it. The primary difficulty is knowing when that is the case.
In the interest of saving you a stressful rush to the mall, or hours on bullion dealer websites, we decided to put together a few examples. For gifting purposes, the following pieces combine design and practicality. You can also look at the best gold coins to buy for more ideas.
1/10 oz. Gold Maple Leaf Coin
Most Canadians recognize the iconic Maple Leaf coin series design so long produced at the Royal Canadian Mint. And most people we spoke to would be very pleased to get some of this official government bullion. One drawback is that these smaller Gold coins trade for more of a premium over their precious metals content. For example, Global Bullion Sells 1/10 ounce Gold Maples at 12.5% per ounce over the metal's spot (roughly CAD $185 at time of writing).
5 g Gold Bar (PAMP Suisse)
Located in Switzerland, PAMP is one of the world’s most renowned precious metals refineries. They are particularly well-know for their Fortuna series minted bars. They exquisitely crafted gold and silver bars are meant to symbolize good fortune and come sealed in plastic with an Assay certificate from the mint. Due to their size, design, and smaller production, they also come with a proportionally higher premium. At the time of writing, the PAMP 5 gram Gold Bar sold for roughly 9.2% over spot or CAD $290.
American Eagle Proof Silver Coin
The United States Mint has been producing proof and uncirculated silver coins every year since 1986. Buy a Silver Eagle and you will not be disappointed. Despite a higher premium over spot, these coins - and yes, they are legal tender - are consistently ranked as top sellers.
10 oz Silver Eagle Bar
One gift I found especially appealing is the 10 ounce Silver Eagle Bar. Elegantly minted by Republic Metals in the United States, this bar will make a statement. We absolutely recommend you save this gift for the family investor or collector because in addition to its aesthetic appeal, it is formidably cost-effective.
The items in this list are bullion. We did not include collectible coins because according to the principles set out, we want to minimize aesthetic losses where possible. With that in mind be sure that you take the time to talk about the gift so the recipient really understand what they are getting. As far as we know, no one has declined a gift of gold or silver. Moreover, no one who has held either metal for the first time has not been excited.
One nice feature about giving gold or other precious metals is that you can order them in volume and have them delivered straight to your door, to be picked and packed up as you see fit. Just make sure you get the mail before the rest of your family does, otherwise you'll ruin the surprise.
In an interview with one of the leading experts on silver shorts, GBS talks to Chris Marcus to learn more about the many angles of the silver story everyone has been talking about for several weeks.