Is buying gold jewellery good for investment reasons?

Posted by Clare Izaguirre on

Are you thinking about adding a golden shimmer to your portfolio? Or perhaps you just want the low-down on how to invest in gold to figure out if it’s right for you?

Either way, we’ve got you covered with all the dos and don'ts of investing in gold jewellery, the potential benefits of doing so and how to get started.

Disclaimer: We do not claim to be experts in the field of gold investment. We sell gold jewellery items and our customers regularly ask us about the investment potential of gold jewellery. It’s for this reason we decided to research the topic and share our insights with you.

Is gold jewellery a good investment?

Gold jewellery can be thought of as a good financial investment due to its ability to hold value and remain pretty sturdy against inflation as well as changes in the economy.

It’s a currency that doesn’t falter too much in terms of its value.

IMPORTANT: It's key to learn that not all gold jewellery is equal in terms of investment potential.

Facts about investing in gold jewellery:

  • High-carat: When purchasing gold jewellery as an investment, it is essential to opt for high-carat gold, such as 18ct or 24ct.
  • Don’t go for gold-plated jewellery: Avoid gold-plated jewellery with only a thin layer of gold coating and little investment potential.
  • Hallmarks are essential: Be aware of the maker's mark or hallmark, indicating purity and authenticity.

Long-term value rules: Gold jewellery can hold sentimental value beyond its inherent value, but for use as an investment you need to also think about the gold’s long-term value, storage and insurance.

Why Invest in Gold Jewellery?

There are plenty of reasons why investing in gold jewellery could be a worthwhile pursuit!

And you don’t need to be a financial advisor or investment expert to do it — and do it well.

These are the reasons why it could be worth it:

Portability and liquidity

Gold jewellery is a portable form of wealth that can be easily transported and traded. When you need money, it can be easily converted straight into cash or other assets.

Diversification

Gold jewellery can be a way to diversify an investment portfolio. It's best to include a mixture of different asset classes (asset classes are groups of investments such as real estate, cash, commodities etc).

By including tangible assets like gold jewellery, you can be smart and potentially reduce risk and increase stability in your overall portfolio. In simple terms, this means you’re not putting all your eggs in one investment basket.

Cultural and emotional significance

Gold jewellery holds cultural and emotional value for many people. It is often seen as a symbol of wealth, status, and personal sentiment. Investing in gold jewellery allows you to enjoy both the investment aspect and the emotional connection it may hold.

Potential for appreciation

While the value of gold jewellery is mostly driven by the price of gold, certain pieces may appreciate over time due to their craftsmanship, historical significance, or rarity.

High-quality and one-of-a-kind gold jewellery pieces may gain value beyond the gold content alone. Take, for example, unique handmade jewellery you won’t find elsewhere.

Solid Gold vs. Gold Vermeil and Gold Plated

Here's a breakdown of each type:

Solid Gold

Solid gold jewellery is made entirely of gold and contains no other metals or alloys. It is typically labelled with the carat which shows the purity of the gold.

Aquila jewellery’s solid 9ct gold ring is a good example.

Solid gold jewellery offers the highest investment potential, as it retains its value based on the gold content alone. The drawback? It’s expensive compared to other types of gold jewellery.

Gold Vermeil

Gold vermeil jewellery is made by applying a thick layer of gold (typically 10 carats or higher) onto a base metal, usually sterling silver. The gold layer must be at least 2.5 microns thick to be considered vermeil.

While gold vermeil jewellery can have an attractive appearance and be more affordable than solid gold, it has minimal investment potential.

Gold-plated

Gold-plated jewellery involves a thin layer of gold applied to a base metal using the process of electroplating. The gold layer in gold-plated jewellery is usually less than 1 micron thick.

It tends to rub off over time which will diminish its value, fast. Again, not a good investment option.

How to Purchase Gold Jewellery

Here are a few tips on how to purchase gold jewellery:

Research and educate yourself

Before making any purchase, take the time to learn about gold jewellery. Research gold purity, pricing, and market trends. Gain knowledge about different types of gold jewellery, such as or designer pieces, and get clued up on their potential for investment.

Buy from reputable sources

It’s super important to buy gold jewellery from reputable sellers. Look for well-established jewellers, certified bullion dealers, or trusted online retailers. Check customer reviews and ratings to make sure the seller has a good reputation for selling genuine gold jewellery.

 

Image courtesy of Gold-Traders

Verify authenticity and purity

Always ensure the jewellery has proper certification that verifies its authenticity and purity.

Look for hallmarks such as the UK Assay Office hallmark, which guarantees the gold quality. Independently verify these hallmarks or certifications to ensure they are genuine.

Compare prices

Get price savvy and compare prices across different sellers to ensure you are getting a fair deal.

Be cautious of offers that seem too good to be true, as they might indicate low-quality or counterfeit jewellery. Research the market rates for gold to have a better understanding of fair pricing.

Consider craftsmanship and design

While investment value is important, also consider the craftsmanship and design of the jewellery. If you intend to wear the jewellery or gift it in the future, choose pieces that tastefully match your style. Handmade items are often preferable.

Secure storage

If you are purchasing a lot of gold jewellery for investment purposes, consider how you will store it securely. Explore options like home safes, safety deposit boxes, or storage facilities offered by reputable sellers, as these are all good ways to protect your investment.

Where to purchase gold jewellery

Here are a few suggestions to help you get started with where to purchase gold jewellery:

​​Specialised Bullion Dealers

Look for reputable bullion dealers who offer gold jewellery specifically designed for investment purposes. These dealers often have a wide selection of investment-grade gold jewellery and other forms of pure gold jewellery.

Online Retailers

Many online retailers specialise in selling gold jewellery for investment. They may even offer limited-edition pieces. Choose a retailer with a proven track record.

Is Gold Jewellery seasonal, event-related or available year-round?

Gold jewellery isn’t necessarily season or event-related in terms of its availability.

While certain festivals or occasions might see the demand for gold jewellery increase, gold jewellery is consistently available year-round; that means it can be purchased for investment any time.

In terms of market trends, gold prices can fluctuate based on various economic factors, global events, and supply and demand dynamics. The value and pricing of gold varies as a result.

Final Thoughts

Investing in gold is a great way to be strategic with your wealth, and it’s an interesting hobby to start. There’s lots to learn about gold jewellery itself - namely solid gold, but with research, professional advice and the right pieces of unique jewellery you could start a new jewellery adventure which not only stands the fluctuations of the economy but appreciates in value over time.

 

 

Do you have any more advice on how to get started investing in gold jewellery? We’d love to hear in the comments below.

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