Gordon Scott has been an active investor and technical analyst or 20+ years. He is a Chartered Market Technician (CMT).
Whether your intended recipient is interested in investing or drawn to the allure of precious metals, consider the benefits of offering gold or silver as a gift. Many investors consider that gold and silver provide a strong store of value with comparatively lower risk of depreciating during times of economic instability. And many recipients will be excited to know they possess a rare and valuable precious metal. Necklace Gift Box
Many investors consider that gold and silver provide a strong store of value with comparatively lower risk of depreciating during times of economic instability. Giving a gift of precious metals could, therefore, be a gift of financial stability and potential long-term growth.
Precious metals are rare, naturally occurring metallic elements that hold high economic value due to their scarcity, durability, and desirability. The most commonly known precious metals are gold, silver, platinum, and palladium. Their unique properties, including resistance to corrosion, make them valuable for various applications beyond just their monetary value. They are used in jewelry, industrial applications, and as an investment. Investing in precious metals is often seen as a hedge against economic instability.
Buying physical precious metals is the most traditional method of gifting them. You can buy bars or ingots (sometimes known as "bullion"), coins, or rounds from precious metal dealers, either in person or online. Today, you can even buy gold and silver bullion online from Costco and Walmart. When buying physical precious metals, it's essential to consider the storage, insurance, and the authenticity of the metals. It's also advisable to buy from reputable dealers to ensure the quality and authenticity of the precious metal.
Purchasing precious metal jewelry is another classic and personal way to gift precious metals. Jewelry often carries emotional significance, making it a cherished gift for many occasions. When buying jewelry as a gift, you have the opportunity to choose pieces that reflect the recipient’s taste, the occasion, or even a shared experience or memory. Reputable jewelers and jewelry stores offer a wide range of options, from rings and necklaces to bracelets and earrings, made from gold, silver, platinum, or other precious metals. Some jewelers also offer the option to customize pieces, adding an extra touch of thoughtfulness to your gift.
It's advisable to understand the purity and quality of the metal, usually indicated by a hallmark, and ensure that the jewelry comes with a certificate of authenticity. Buying from reputable and established jewelers, whether in physical stores or online, can help ensure that you're purchasing high-quality, authentic pieces.
Auctions, both online and in-person, can be exciting venues to acquire unique or rare precious metal items as gifts. While the competitive bidding environment may drive prices higher, the chance to gift a distinctive or historically significant piece could be well worth the extra cost.
Exchange-Traded Funds (ETFs) are a more modern way to invest in precious metals without having to deal with physical storage. Precious metal ETFs track the price of the precious metal and are traded on stock exchanges, making them accessible to ordinary investors. They offer liquidity and ease of trading but do not provide physical ownership of the metal.
Investing in stocks of mining companies is another, more indirect way to gain exposure to precious metals. By investing in a mining company, you are essentially betting on the company's ability to profit from mining and selling the precious metals. It's a more indirect way of investing in precious metals and comes with risks associated with the company's performance and the mining industry.
These could be suitable options for those who appreciate the value of metals but prefer a more liquid or diversified gift in the form of an investment product.
Bullion can be purchased at a spot price, which includes both the cost of the metal itself and additional costs related to the transaction. In most cases, the best way to purchase bullion or coins is through a licensed retailer. Popular online licensed retailers include American Precious Metals Exchange (APMEX), JM Bullion, and Wholesale Coins Direct. As mentioned, Walmart and Costco now offer bullion for purchase through their websites. The process is fairly straightforward and will look like this:
You’ll also need to account for the continued costs of insurance for the gold or silver after your recipient has them in their possession. If this is a cost that you don’t want to impose on your recipient, be prepared to make alternative arrangements such as continuing to pay for insurance yourself.
The process of buying and gifting gold or silver jewelry is similar in many ways to that of bullion or coins. One key item to keep in mind is that many pieces of jewelry labeled as gold or silver may have metals of much lower purity compared to bullion or even coins. It’s helpful to consult with a caratage chart, which provides insight into the composition of gold or silver by karat.
As with bullion and coins, be vigilant to ensure that any retailer you buy from is reputable and licensed. Beware of deals that seem too good to be true. Unfortunately, there have been countless instances over the years of fake or fraudulent gold and silver jewelry and bullion sales.
Precious metal ETFs or mining stocks can be purchased through your broker and then gifted as any other share of stock. This involves an electronic transfer of the shares to the recipients' brokerage account.
When buying gold or silver jewelry, it’s useful to know that items marketed as gold or silver may have significant variations in the purity and quantity of those precious metals. This is why it’s important to use a trusted, reputable dealer and to understand how caratage works.
There are tax implications for individuals owning gold or silver in the form of bars, ingots, coins, and other physical items. The Internal Revenue Service (IRS) considers these items to be capital assets and collectibles. As such, they are subject to capital gains tax. Capital gains tax is a levy on the profit made when an investor sells an investment. Your gift recipient may be subject to capital gains taxes if they choose to sell the gold or silver at a future time.
As the person giving gold or silver, you should also be aware that your gift may be subject to gift taxes. This is dependent upon the value of the gift that you give, among other factors. Consult with a trusted tax professional for specific guidance regarding the taxes on your gift as this will vary depending on where you live.
In the U.S., there aren't specific limits on how much physical gold you can gift to someone. However, there are tax implications and other considerations to keep in mind:
It's advisable to consult with a tax professional or legal advisor to understand the full implications and regulations surrounding gifting physical gold in the U.S., especially when large values are involved.
Inheriting precious metals like gold or silver necessitates a blend of legal, financial, and practical steps. Initially, verifying legal ownership according to the will or probate process, and obtaining necessary documentation is crucial. It's advisable to get an appraisal from a reputable appraiser to ascertain the current market value of the metals and document this alongside any certificates of authenticity. Ensuring safe storage, either in a secure home safe or a safe deposit box, protects your inheritance from theft or damage. It's also prudent to understand the tax implications of your inheritance, possibly consulting a tax professional to grasp any estate tax or capital gains tax liabilities, and to learn about reporting requirements.
Deciding on whether to sell, hold, or gift the inherited metals is also an important step. If selling is your choice, researching reputable dealers, auction houses, or online platforms will serve you well. On the other hand, if gifting the metals, being aware of the tax implications is important. Incorporating the value of the precious metals into your overall financial planning, and understanding how they fit into your long-term investment goals is beneficial. Furthermore, educating yourself about the precious metals market and seeking professional advice from financial advisors and legal counsel can provide a structured approach to managing your inherited assets wisely.
The most common ways to give gold or silver as a gift is through tangible items like bullion, coins, or jewelry. You can also provide indirect gifts of gold or silver through shares of an exchange-traded fund (ETF) or metals mining companies, for example.
You may. Gold or silver gifts may be subject to gift taxes, depending upon the value of your gift and other factors. Recipients of precious metals gifts may also need to pay capital gains taxes if they sell the gold or silver at a future date.
Be sure to purchase your gold or silver gift from a reputable, licensed retailer. You’ll need to take into account that the cost of delivering, storing, and insuring these items can be significant. There may be costs associated for your recipient in these areas, so be sure to have a plan for how those costs will be covered.
Precious metals like gold and silver can make for a valuable and meaningful gift. You may consider giving your recipient indirect investment exposure to precious metals through an ETF, a mutual fund, or shares in mining companies. However, part of the allure of gold or silver as a gift may rest in giving your recipient a tangible and physical asset. In that case, you can give precious metals in the form of bullion, coins, or jewelry. In addition to any tax implications of valuable gifts, if you’re planning to give physical gold or silver, it’s important to shop with a reputable dealer and keep in mind the costs associated with delivery, storage, and insurance.
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Internal Revenue Service. “Frequently Asked Questions on Gift Taxes.”
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