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Yes, gem is in the scrabble dictionary

...and is worth 8 points by itself.

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Gem Definition

noun

A beloved or highly prized person.
from The American Heritage Dictionary of the English Language, 4th Edition
A pearl or mineral that has been cut and polished for use as an ornament.
from The American Heritage Dictionary of the English Language, 4th Edition
A type of muffin.
from The American Heritage Dictionary of the English Language, 4th Edition
Something that is valued for its beauty or perfection: a little gem of a book.
from The American Heritage Dictionary of the English Language, 4th Edition
A precious or sometimes semiprecious stone cut and polished for ornament.
from Free Scrabble Dictionary

verb-transitive

To adorn with or as if with precious or semiprecious stones.
from The American Heritage Dictionary of the English Language, 4th Edition

verb

To adorn with or as if with gems.
from Free Scrabble Dictionary

abbreviation

Ground-effect machine.
from Free Scrabble Dictionary

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Top Words by points

Points
gem

6

2 letter words with GEM

Points

em

4

me

4

3 letter words with GEM

Points

gem

6

meg

6

Found 4 words in 0.11422 seconds