Can Gold Jewelry be a Good Investment?

Joyce in New York asks “Can gold jewelry be a good investment?”

Bullion.Directory’s Ask Ally Service
By Alison Macdonald
Commercial Editor at Bullion.Directory

While the heart is important, as I’ll cover, Joyce is asking about investment value specifically and with gold jewelry this can be complicated…

Let’s start with the sentimental side. Gold jewelry often holds immense emotional value. It can be a family heirloom, a love token, or a personal reward. This type of investment is measured not in price but in sentiment and memories.

It’s the kind of thing that can’t be quantified on a balance sheet.

As an example my late mother’s wedding ring was something I held very dear. It was probably only worth a few hundred dollars scrap value, but when I lost it during my move to Dubai I was devastated and would have given thousands to get it back.

So the emotional side of jewelry cannot be ignored – as at the end of the day we are emotional beings.

But emotional investments don’t pay the bills…

Gold as a Practical Investment – from a Western Perspective

In the West, if you’re looking at gold jewelry purely as a financial investment, prepare for a bit of a reality check.

The markup on jewelry can be, quite frankly, astronomical – I’m talking in the the region of 500-5000%. Yes you’re paying for craftsmanship, but branding, retail overheads and profit take the value of any piece’s actual gold content and run it through a magical multiplier.

The moment you walk out of that jewelry store, the piece has already lost a significant chunk of its value, much like driving a new car off the lot. And if you’re in a pinch and need cash fast, cash for gold places will give you less than it’s melt value.

So, from a cold, hard cash perspective, it’s usually not the wisest choice for your wallet.

There is however an exception to the rule: high-end designer jewelry. Like a rare vintage wine, certain designer pieces can retain or even increase in value over time.

Think iconic brands or limited-edition collections. Most of the higher end brands like Cartier® or Tiffany® will at least retain a huge amount of their premium in the secondary market, but…. if you want a profit?

You need a keen eye, deep pockets, and a bit of luck.

It’s a Different Story in the Middle East and India

Now, let’s jet over to the Middle East and India, where gold jewelry plays a whole different ball game.

Here (I’m writing this in Dubai) high-karat jewelry such as 22k pure gold is commonly sold with minimal markup – in some cases sold with “zero maker’s charges”.

It’s exactly like buying a gold bar you can wear – and this is why families often use it as a way to store and pass down wealth. Portable money for the privacy-inclined.

The premium over the intrinsic value can be minimal – believe me, this is no lie. Only last night I bought a 40g 22k gold bangle at 1% over spot, plus 5% tax. I can barely buy basic bullion at that low a premium in the US or UK.

Here, and in India high karat jewelry is a practical, culturally ingrained form of investment that marries tradition with financial savvy.

Back to the West

Overall, in the Western world, gold jewelry is best viewed as a beautiful gift, an adornment, rather than a financial investment. It’s something to be treasured and enjoyed, not something to buy for a return on investment.

If you’re looking to invest in gold, stick to bullion or coins.

But if you’re looking to invest in a moment, a memory, or a feeling, then gold jewelry might just be the treasure you’re seeking.

Just remember, while it may not grow your bank account, it will undoubtedly enrich your life in other ways. And sometimes, that’s worth its weight in gold.

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