Is Gold Jewelry a Good Investment?
Gold coins and bars are two of the most popular ways for gold stackers to invest in their favorite precious metals. But these aren’t your only options. Every year, investors turn to a variety of products for their stacking needs, including gold jewelry.
Gold jewelry is also popular among more than just investors. Gold earrings, bracelets, and even engagement rings are some of the most culturally important objects made by the precious metal industry.
For many collectors, gold jewelry is an overly expensive way to invest in gold bullion. After all, products like gold engagement rings are sold at high premiums over spot price – especially when we compare them to classic investment vehicles, such as bars or coins.
Is gold jewelry a good investment? If you’re able to find authentic gold jewelry sold at a low premium, these products can be a great way to build rarity and numismatic value into your portfolio.
In today’s Bullion Academy guide, we’re giving investors an inside look at whether or not gold jewelry is a good addition to your precious metal portfolio.
Is Gold Jewelry Expensive?
Gold jewelry can be very expensive, depending on which type of jewelry you choose to buy. Highly artistic designs on products like engagement rings will generally come with higher premiums than simple gold bracelets or earrings.
Most seasoned gold stackers complain that premiums for gold jewelry are too high to justify buying this type of product. This perspective makes sense, too, given that most jewelry products are sold at a higher premium over melt value than gold coins or bars.
Tracking Gold Jewelry Premiums
Premiums refer to an amount of money paid in addition to a product’s melt value. If you convert the gold content of your jewelry to troy ounces and then multiply that number by the current spot price of gold bullion, you’ll have the product’s melt value.
Subtract its melt value from the total cost of your gold earring, bracelet, or accessory, and the result is your precious metal premium for that product.
Is gold jewelry a good investment? Because these products come with high premiums, some investors opt for gold coins or bars instead of jewelry. However, high premiums are added to the cost of gold jewelry for a reason.
Gold jewelry is often beautiful, rare, and collectable. Certain gold earrings, rings, or necklaces are so rare that they’re nearly one-of-a-kind. Even if you pay a high premium for these rare gold accessories, you might make that money back – and more – when you choose to sell.
Is Gold Jewelry Pricier Than Gold Bars?
Gold jewelry is more expensive than gold bars. This is one big reason why so many investors avoid jewelry and go with other gold products instead.
Is gold jewelry a good investment? Despite its high premiums compared to gold bars and coins, some investors love the numismatic value of a good piece of gold jewelry. Certain gold earrings or bracelets from reputable companies can appreciate in value considerably over time. This means that, while you might pay high premiums to buy gold jewelry, you’ll also get paid more once you’re ready to sell!
Pros and Cons of Investing in Gold Jewelry
Like gold bars and coins, there are both pros and cons to investing in gold jewelry. Featuring beautiful designs, collectability, durability, and investor demand, gold jewelry is one of the oldest ways to invest in gold bullion.
However, cons to investing in gold bullion jewelry include high premiums, low reliability, and the ever-present threat of counterfeit, fake gold.
Let’s take a look at the pros and cons of gold jewelry to help you decide: is gold jewelry a good investment?
Pros of Buying Gold Jewelry as an Investment
Is gold jewelry a good investment for your precious metal portfolio? Four of the main advantages of buying gold jewelry include beautiful designs, collectability, durability, and exceptionally high demand.
Beautiful Designs
The clearest advantage to buying gold jewelry is that it’s beautiful. Many gold jewelry products are meticulously crafted by hand to deliver a personalized, intricate work of wearable art. Hero Bullion even sells our own gold bracelets to help you stack gold that you can show off by wearing.
Some gold jewelry pieces are more beautiful than others. What’s the best gold jewelry to buy? The answer to this question depends on your own personal tastes. Some gold jewelry investors prefer simple, no-frills designs. Others like the look of ornate, intricately detailed gold bracelets, rings, and earrings.
No matter your personal preferences, gold jewelry is a beautiful way to stack gold – and it’s been the gold investing method of choice for centuries. Even the Ancient Romans and Egyptians loved and appreciated the look and feel of classic gold jewelry.
Collectable Value
Because gold jewelry often features beautiful, hand crafted designs, it’s no surprise that this is one of the most numismatically valuable ways to invest in gold bullion.
For numismatic stackers, we recommend looking for rare gold jewelry products. Brand name and vintage gold earrings, bracelets, and necklaces can be fantastic options if you’re looking for gold that might become more valuable to collectors in the future.
Before you buy gold jewelry for its collectability, make sure to do some research into the jewelry market. Certain gold jewelry products may lose most of their value as soon as you leave the shop. Of course, authentic gold jewelry pieces will always be worth at least their melt value in pure gold.
But the collectable value of a gold jewelry product depends on a few different factors. The product’s beauty and design are important considerations in determining its long-term price appreciation outlook.
Even more importantly, gold jewelry is wearable. This means that contemporary fashion trends play a role in the resale value of any given jewelry product. If you purchase a vintage gold ring right before a new style becomes more popular, expect the premium value of your investment to decline.
Is gold jewelry a good investment for gold stackers? We generally only recommend gold jewelry if you’re someone who closely follows and understands jewelry and fashion trends.
Durability
Unlike the easy to understand purity system used in gold bullion circles, most gold jewelry purities are quoted in ‘karats.’ A karat is equal to 1/24 parts gold. This means that 24 karat (24k) gold is about as pure as it gets – nearly 100% pure gold bullion.
While some investors assume that the purest gold is always the best, this might not be the case. In fact, we find that 22k jewelry (.9167 fine) is often the better investment. In addition to giving you a slightly darker color on your earrings or necklaces, 22k gold jewelry is quite a bit more durable than 24 karat gold.
This durability is important, especially if you plan to wear your investment. The last thing you want is to scratch a $2,000 gold necklace – which is a real possibility when you buy 24k gold jewelry.
Is gold jewelry a good investment? If you like to show off your gold stack, investing in highly durable 22k gold jewelry can be a great option.
Investor Demand
Is gold jewelry a good investment historically? Gold jewelry is one of the oldest ways to invest in gold bullion. We can find traces of gold jewelry as far back as Ancient Egypt – and the industry is still one of the biggest in the world.
Humans have always loved gold jewelry, and this high investor demand makes it one of the most time-honored ways to put your money on gold bullion.
Cons to Investing with Gold Jewelry
There are three main downsides to investing in gold jewelry: extremely high premiums, low resale value, and the possibility of buying counterfeits.
Extremely High Premiums
We discussed this con to buying gold jewelry earlier, but it is worth mentioning just one more time. Gold jewelry is one of the most expensive ways to invest in gold. Gold earrings, necklaces, and other wearable investments require quite a bit of work to put together.
This inflated production cost is kicked back to the consumer. While gold jewelry is a beautiful (and wearable) way to invest in the world’s favorite precious metal, its popularity comes at a pretty high cost.
Sometimes Tough to Resell
Is gold jewelry a good investment for you? The quality of an investment depends on several factors, including ease of resale – or liquidity.
For gold jewelry, ease of resale is tough to pin down. Some gold jewelry items are always in demand. 22k gold engagement ring settings, for example, are never particularly hard to liquidate for some quick cash.
Other products in the gold jewelry industry are highly dependent on market sentiment. Fashion trends can either elevate or tank the value of vintage jewelry, and the story is much the same for the hundreds of contemporary jewelry styles on the market.
If you plan to invest in gold jewelry, make sure you have a good grasp of the market’s historical trends. If you’re smart and do the proper research, you may be able to secure a hefty profit by reselling your gold jewelry. Otherwise, be prepared to potentially lose some cash if your ring or necklace goes out of style before it’s selling time.
Counterfeits Abound!
The industry for counterfeit jewelry is one of the largest in the world. This shouldn’t come as much of a surprise. Gold jewelry is easier to forge than coins with advanced security technology, such as the British Gold Britannia.
If you buy gold jewelry through a reputable dealer like Hero Bullion, you can rest assured that you’re not going to receive a fake or ‘watered down’ bracelet or necklace.
But if you plan to buy from an individual, make sure to bring in an outside consultant. The last thing you want is to pay thousands of dollars before realizing you’ve been conned into buying fake gold jewelry.
Comparing Gold Jewelry to Other Gold Investments
Is gold jewelry a good investment? For gold stackers, we tend to recommend the classics – gold bars and coins – instead of gold jewelry. Let’s compare these three products in the next subsections.
Gold Jewelry Versus Gold Bars
Gold bars are a cheaper, more consistent method of investing in gold than gold jewelry. When you buy gold bars from dealers like Hero Bullion, you’re paying a very small premium over the base melt value of each product’s gold bullion.
This isn’t usually the case for gold jewelry. While you may be able to cut down on premiums by buying low-end, basic gold jewelry, you’ll still usually pay more per troy ounce of gold than you would by buying gold bars.
Still, some investors feel that gold jewelry is more beautiful than gold bars. This isn’t necessarily untrue, although gold stackers also often appreciate the classic look, feel, and shine of a genuine gold bullion bar.
Is Gold Jewelry a Better Investment Than Gold Coins?
Both gold jewelry and gold coins come with high premiums over spot price. While some gold jewelry products may appreciate in value over time, we find that gold coins are the more traditionally profitable way to put your money on gold.
We might be a little bit biased; Hero Bullion sells quite a few more gold coins than gold jewelry pieces. However, gold coins are never out of style. The same can’t be said for gold jewelry items, which get their value from investor demand and contemporary fashion trends.
If your goal is to invest in gold, we recommend sticking with the classics: gold coins and bars.
Final Thoughts: Is Gold Jewelry a Good Investment?
If you’re someone who wants to build their gold stack with a diverse set of beautiful products with high investor demand, gold jewelry might be the right choice for you.
For investors who are looking to invest in their first gold jewelry piece without breaking the bank, we offer competitive rates on our certified gold bullion bracelets.
We’re always happy to answer any question you may have, so feel free to hit up our customer service team for some personalized advice!
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About The Author
Michael Roets
Michael Roets is a writer and journalist for Hero Bullion. His work explores precious metals news, guides, and commentary.