There are two sides to consider when you look at gold jewelry as an investment.
First, there is the value of the gold itself.
Second, there is the value that comes from the enjoyment you receive from wearing that jewelry.
And it’s not just about enjoyment. Wearing gold can also communicate wealth and status.
One way or another, gold can always dazzle and impress.
I remember spending hours walking the lanes of the Grand Bazaar in Istanbul. This was many years ago now. But my enduring memory is of all the different stalls selling gold in the form of chains, bracelets, rings and more.
So much gold!
Turkey has a tradition of working gold that goes back over 5,000 years, so wearing part of your wealth in the form of jewelry has deep cultural roots.
And it’s not just in Turkey that people like to spend their money on gold jewelry.
The same is true across the Middle East, in Northern Africa, India and China.
India is perhaps the most prolific spender on gold jewelry.
Demand for jewelry in India peaks during the time of year when weddings are most popular – in the fall – and also during Diwali, the festival of lights, which takes place between mid-November and mid-December.
In other words, in many parts of the world the question isn’t about whether or not to buy gold jewelry… it’s about how much to buy.
In the West, buying gold jewelry is more about weddings and bling.
We don’t have the same traditions as other countries when it comes to buying, gifting or wearing gold jewelry.
Yes, we buy gold rings when we get married. But that’s not a huge gold purchase.
If you want the kind of ostentatious spending on gold you’ll find elsewhere in the world, take a look at the wild spending on bling within the hip-hop culture.
In the 1980 top rap artists were spending tens pf thousands of dollars on heavy gold chains and rings. A decade later, tens of thousands had turned into hundreds of thousands.
An entire industry grew out of making jewelry for rap artists and their fans.
Anyone can now buy 24k jewelry as gold bullion, and track its value over time.
The key to buying gold jewelry as an investment is to buy 24k gold only.
When you do that, you’re essentially buying jewelry as gold bullion.
There are some companies that specialize in creating and selling jewelry as gold bullion.
A company I have purchased from myself is Mene.com. (I’m not affiliated with them in any way, other than as a customer.)
They sell all the gold jewelry items you would expect… like chains, bands, bracelets, earrings, charms and more.
And they are all made of 24k gold. (Most of their items are available in platinum as well.)
What is different with Mene is that when they price an item, they separate out the cost of the gold and the cost of creating the jewelry. This way you can always keep track of how much you’ve actually invested in gold bullion.
Log into your account and you can track your gold investments over time. Up or down.
In addition, you can request that Mene buy back any item you no longer wish to own.
In other words, buying jewelry can be like buying gold coins. Buy or sell whenever you want.
Gold jewelry is about the fun of it too.
When you buy and store gold coins or bars, it’s all about the investment. Most of the time, you barely get to see what you purchased. It’s locked away in a safe place.
With jewelry, while you may pay a premium for the creation of the item – you’re paying for more than just the gold – you also get to enjoy it.
Beautiful jewelry is a pleasure to wear, and can communicate wealth and status at the same time.
As for whether it’s a good investment, that will always depend on the price of gold.
Further reading on owning gold:
6 Good reasons to own gold coins or gold bars.
Gold Jewelry: Investment or Adornment?
Storing gold – at home, in a safety deposit box, or with your dealer.
Bitcoin… It’s like gold, but digital. There’s plenty to love about it.
While gold jewelry can be a beautiful and sentimental possession, it’s not an ideal investment for several reasons:
1. **Low resale value**: Gold jewelry is often sold at a significant markup, and when you try to resell it, you’ll likely get a fraction of the original price. This is because jewelry stores need to make a profit, and the resale market is often flooded with similar items.
2. **Craftsmanship and design costs**: A significant portion of the cost of gold jewelry goes towards craftsmanship, design, and marketing. These costs don’t add value to the gold itself, but rather to the aesthetic appeal of the piece.
3. **Gold content**: Gold jewelry is often alloyed with other metals to increase durability and strength. This means that the gold content might be lower than you expect, reducing its value as an investment.
4. **Storage and security concerns**: Gold jewelry takes up physical space and requires secure storage to prevent theft or damage. This can be a hassle and add to the overall cost of ownership.
5. **Liquidity issues**: Gold jewelry can be difficult to liquidate quickly, especially if you need to sell it in a hurry. You might not get a fair price, and the process can be time-consuming.
6. **No dividend or interest**: Unlike other investments, gold jewelry doesn’t generate passive income or dividends.
7. **Taxes and insurance**: Depending on your location, you might need to pay taxes on the purchase or sale of gold jewelry. Additionally, you’ll need to insure your jewelry against loss or damage, which adds to the overall cost.
8. **Market fluctuations**: The value of gold jewelry can fluctuate with market prices, but it’s not as easily tradable as gold coins, bars, or ETFs.
If you’re looking to invest in gold, consider alternatives like:
1. Gold coins or bars: These offer a more direct investment in gold, with lower premiums and easier liquidity.
2. Gold ETFs (Exchange-Traded Funds): These allow you to invest in gold without physical storage concerns, with the added benefit of diversification and professional management.
3. Gold mining stocks: Investing in gold mining companies can provide exposure to gold prices while also offering the potential for dividends and growth.
Remember, it’s essential to assess your investment goals and risk tolerance before investing in any asset, including gold.