Gold has been among us for centuries. We have used it to trade and to adorn our royal and noble of our societies over the ages.
Nowadays, we still love to wear it on our bodies as lovely ornaments and we have come up with many shades of color for it in jewelry, it’s exhilarating. Some of us, however, see gold as more than just an accessory. To them its more of an asset. Could it be that buying gold jewelry could be a great form of investment?
The rarity of gold in finding it, refining it, cutting, or shaping it all factor in when it comes to the value of a gold piece. Gold jewelry is even more of the same as what matters is the value of the pure gold in a ring, bracelet, or earring.
This uniqueness raises the value of gold and the demand for this rare commodity rises and falls like ocean tides. Oh, do not forget to check our last post: Is Buying diamond Jewelry A Good Investment?
Is Buying Gold Jewelry A Good Investment?
Gold retains its value over a long period of time. In some cases, in fact, it increases in value and you can get it for more in a few years. You would need to have to invest in a higher-priced gold piece though if you wanted it to later equal some substantial amount of cash.
According to the Central Banks in the world, they have listed gold as a Class A category investment type. This means they highly recommend it as an investment because its value does not depreciate over time or with inflation.
People in the Eastern part of the world like the Indians and the Chinese have this one hobby of jewelry collection in common. They have long believed in investing in jewelry to use it on a rainy day.
After real estate, stocks, and bonds, the third-best investment has got to be gold. It cannot be used or attached in any way to debts or taxes. It also is untraceable finances that you could take with you even when you can’t access paper money.
You need to be careful not to buy gold during the super-bubble season. This is a time when panic is created about a plausible market crash and it forces people to rush to invest in gold. Sadly, the rules of business call for an increase in price for a spike in demand. This way, you end up paying more for less.
That’s a less than great gold quality for the price you would get a grade or two higher up. When it comes to resale, you are appalled to find out it amounts to very little. Expensive gold does not automatically mean valuable gold.
Deciding to invest in gold is a commitment. You will be required to be involved in every step. You will need to inspect the jewelry yourself. Have trusted jewelry or metal experts assess the quality of different gold grades.
The stakes are high and so are the returns. You also have to be ready financially to handle and maintain this investment. Gold is a physical and tangible investment, unlike your insurance. You can hold it and move it around.
More than investing in gold, you will need to invest in storage facilities that are also safes where no one can get access to other than yourself. These structures cost money, time, and energy in installing and setting up.
Burglary is a very real threat because gold cannot be tracked and stolen gold would be gone without a trace. Whether its security cameras or physical guards, you will have to keep your gold guarded to have peace of mind.
That’s one reason why it’s not a really good investment. Gold owning is known to make people a bit paranoid with them imagining that someone is always out to get steal their gold. Maybe that’s not you but we’re just putting it out there.
Is 14K Gold Jewelry a Good Investment?
14k gold is a metal alloy consisting of 14 parts of gold with 10 parts of assorted metal alloys like copper, zinc, silver, palladium, and nickel. Each of these metals is mixed with the 14 parts of gold for specific reasons.
For instance, palladium or silver is used to primarily bleach the gold color of the gold then zinc is added as the secondary bleach. That’s how you get the white gold color hue which is reinforced with a rhodium coating later.
For a rose gold shade, you need to add copper. Copper gives the metal alloy the pink and red color that is visible in rose gold jewelry pieces. The more copper you add, the redder the rose gold shade.
Yellow gold is a result of copper, zinc, and gold. A good mix of these three gives the bright golden yellow shade that so many people have fallen in love with.
All these gold jewelry pieces have become increasingly impressive, innovative and their demand seems to be growing by the day. especially in the bridal rings industry, gold has not been this popular for a while.
If you can invest in a high-quality 14k gold alloy, maybe one blended with palladium, platinum, silver, you can sure get a lot for it in a few decades or so.
Why Gold Jewelry is a Good Investment?
The most obvious reason why gold jewelry is a good investment is the fact that it doesn’t rust. It will live long after you are alive.
That’s why most families in Asia have long handed down jewelry as wealth to their offspring. To this day the Indians and Chinese still collect jewelry for the purpose of saving for a rainy day.
That rainy surely does come and those who own gold are safe because gold is not affected by inflation prices or changes in the economy.
This means that the value it is worth it any time is independent of any other factors other than its availability and demand.
The bubble effect that happens in times of an impending crisis, influences many people to run to the stocks exchange to buy gold as the safest investment.
While this is terrible for the first-time investor who is maybe unaware of what happens, they end up losing their money investing in not so valuable metal.
For those who have gold and are in the business of gold, these spikes are good for them in profits and they would like it more every day.
If you have a couple of gold pieces that you can pawn, you could sell them during this bubble period to get a huge profit.
Pros and Cons of Investing in Gold Jewelry
- It has a socio-economic world and can be liquidated and used instead of cash in hard times
- It is an investment that you can wear and also sells at a profit
- Gold is shiny and it does not rust
- It is always fashionable
- It has multiple uses even in the manufacture of electronics
- Owning gold presents new issues such as where to keep it and how to transport it. You would need to have a secure lock safe to keep them in. that adds a new cost you had not envisioned.
- Gold doesn’t earn passive income like other insurance plans that pay out dividends. Gold only gives you value when you finally sell a piece of it.
Tips for Buying Gold Jewelry
Before settling on your choice of metal as an investment in gold, make sure you know what exactly you have signed up for and that the quality and grade is real and authentic.
To know this for sure, you need to understand the different grades of gold in karat value and how this information is represented on authentic gold pieces.
The three main types you will come across is 10k, 14k, and 18k gold. These values represent the measure of real gold the gold metal alloys have out of a 24k of pure gold measure. Dividing one value over the other like 18k/24k = 0.75 * 100 = 75% pure gold in 18k gold jewelry. For 14k its 58.3% and for 10k its 47.1%.
These values are etched somewhere on the jewelry to certify their authenticity. If any jewelry lacks a marking it is not legitimate.
Conduct a local and online search for jewelry stores that sell great gold jewelry. Most people tend to run to the popular stores because they have built up a name for themselves but sadly, the chances that they charge you for their brand is very possible.
Meaning you might find a valuable piece of metal in rare places like online or with independent retailers. However, exciting this path is because of the unbelievably cool stuff you might come across, you could also quite easily get duped.
Be careful enough to check and double-check your sources and their certification. Also, be proactive in finding out the metals alloyed with your gold.
If they are palladium or platinum or silver, your gold piece will be worth much more. Not to mention it will be safe for all skin types to wear and that it will last a lifetime.
Based on how you look at it, how much money you have in your depository and how patient you are to wait for a profitable return, gold jewelry could be a great investment in the modern times.
Not only does it indulge you in the flashy lifestyle that you have worked so hard to be able to afford but it also diversifies your mix of businesses and possible income generators.