Is Gold Jewellery a Good Investment?
There is little doubt that gold jewelry is a good investment – but only if you want to wear it.
Take it from the experts, who have said for years that gold jewelry is second to none as a personal investment with psychological and financial benefits. Yet, is gold jewellery a good investment from a strictly business point of views?
It may not be the ideal choice from a purely financial perspective.
Rich Duprey over at The Foolbrings some important points to bear on whether gold jewellery is a good investment.
He points out that when asking is gold jewellery a good investment, we need to keep something in mind.
Demand for gold jewelry takes up approximately 43% of total demand. That means manufacturers of jewelry will be able to charge more for their work because consumers will want it anyways.
This is on top of the already inflated value of jewelry from a purely material point of view. Note that you are unlikely to buy gold jewellery at or near the gold value: the handiwork is expensive, and taxes may apply.
When is gold jewellery a good investment? Should I Buy Gold Coins Instead?
For obvious reasons, gold coins are less practical than jewellery. If you want something wearable, jewellery can be a more attractive purchase.
It’s not like you will ever display gold coinage as openly, let alone incorporate it into your outfit for an important work gala.
Coinage is simply not as sought after or pleasurable to own for most people. Is gold jewellery a good investment when you compare it to gold bars?
Naturally, the cost of gold jewelry that amounts to 1 troy oz. will be far more than a 1 oz. bar because of its practical use and beauty.
However, that does not mean you should avoid gold coins. If you want something nicer than a bar but less prone to damage than a necklace, go for some coin.
It is also much very easy to purchase. Coins are sold online from registered companies and by going with a top-tier seller you ensure you won't get snubbed with fake gold.
Is gold jewellery a good investment for the gold value?
Your hunch for practicality would be backed up by the numbers. A 1 oz. gold coin will run you $1,300 at spot price. It’s easy to calculate the value and costs of such a purchase. Compare that with complicated process of determining the value of a gold necklace, and it becomes clear that you’re paying a lot in dealer and designer fees.
You have to really want gold jewellery for it to make sense as an investment for the gold.
Much more viable options include gold coins or gold bars. Arguing against the sentimental value of gold jewelry will only get you so far.
At a certain point investors wondering is gold jewellery a good investment want to feel like they are getting something out of their portfolio.
Gold jewelry provides so much more than a hedge against inflation.
These are the questions you need to ask your bullion dealer to make an informed purchase and make sure that precious metals are working for you.