Why you should invest in gold bars and coins for the holidays
There's always someone who's hard to shop for around the holidays. And while a good book or a flush gift card is always an option in a pinch, there's another route you may want to explore this season: gold bars and coins.
Not only is gold a unique and valuable gift, but it can also offer several financial benefits to whoever receives it.
Are you having trouble deciding what to get a friend or loved one this holiday season? Below we'll break down why buying gold bars and coins might be a good choice this holiday season. You can easily explore your gold options here now.
Why you should invest in gold bars and coins for the holidays
Here are four reasons why you should considering investing in gold bars and coins this holiday season.
Gold is a strong hedge against inflation
One reason you might want to give the gift of gold is that it's typically considered a good hedge against inflation. When the dollar falls in value, gold — an always scarce resource — often holds its value, protecting your wealth despite inflationary changes.
"Gold has proven over long periods of time to be a suitable hedge against inflation and depreciation in the U.S. dollar," says Matt Dmytryszyn, chief investment officer at financial management firm Telemus. "It is also viewed as a flight-to-safety asset and can act well during market shocks or periods of elevated uncertainty."
The current U.S. inflation rate is 3.7%. While that's down from its 9%-plus high last year, the Federal Reserve is still actively fighting to get it lower (a 2% rate is the goal).
Learn more about how gold can help with inflation here.
Gold is highly liquid
Another perk to gifting gold is that it's a very liquid asset. There's always demand, and you can buy and sell it at any time. This goes for gold bars and bullion, of course, but other types of gold investments, too.
"The most liquid way to buy gold would be through a gold bullion exchange-traded fund (ETF)," says John Koch, a senior investment analyst at investment firm iSectors. "A gold bullion ETF will have a ticker symbol just like a stock, and you can buy or sell it throughout the trading day. Over time these ETFs have tracked the price of gold very well."
Retaining liquidity is important to many investors, as it ensures you have access to quick cash should the economy hit a downturn or you fall on hard financial times.
Gold is a good diversifier
If the person you're gifting is big on building their investment portfolio and nest egg, then gold is also a smart choice, as it can help them diversify and balance their portfolio risk better.
"Gold has a return profile with a very low correlation to traditional stocks and bonds, which is what makes up most investor's investment portfolios," Koch says. "If stocks and bonds go through a period where both struggle, such as last year in 2022, gold has the potential to protect against those poor returns through its differentiated return stream."
Generally speaking, most professionals recommend holding no more than 5% to 10% of your portfolio in gold, so keep this in mind as you purchase on behalf of your loved one.
Learn more about how gold can help diversify a portfolio now.
Gold is scarce
Finally, gold is a scarce commodity. There's only so much of it to go around, so it retains its value and remains in high demand despite changes over time.
As Frank Giustra, CEO of investment firm Fiore Group, puts it, "Paper currencies come and go. They never last forever. Gold is money, always has been. It is the ultimate store of value."
Buy strategically
If you're considering buying gold for holiday gifts this season, keep in mind that prices tend to vary based on how much volume is produced, so bars may come at lower prices per ounce than coins.
You can also explore other gold investing options like gold IRAs, gold ETFs, or even gold stocks, too. Just make sure you use a reputable dealer if buying physical gold.
