Why is Gold Jewelry So Expensive? | Budget Investor Guide
At a Glance:
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- Gold jewelry is often sold at higher premiums than gold coins or bars.
- The main reason why gold jewelry is so expensive is because it is expensive to produce.
- Gold coins and bars are cheaper alternatives to investing in gold jewelry.
Why is Gold Jewelry So Expensive?
Gold jewelry is beautiful, but it’s also expensive. This specific type of gold product occupies a peculiar spot for gold investors. Gold rings, bracelets, and necklaces are meant to be worn – not just stored. Despite the high price tag, gold jewelry is one of the most popular types of gold bullion.
This shouldn’t come as a surprise. The lion’s share of gold jewelry is purchased either for personal use or as a gift. Marriage proposals, anniversaries, and birthdays are all great occasions to shell out hundreds of dollars in premiums to purchase beautiful gold jewelry.
But why is gold jewelry so expensive? Gold jewelry is especially expensive in 2024 because of high production costs, beautiful designs, record gold prices, and extreme demand.
Today, we’re taking a look at the factors that make gold jewelry so expensive compared to other types of gold. We’ll also give investors a few tips for finding cheap gold jewelry, as well as a couple affordable alternatives for stackers who want to save some money.
High Production Costs
The biggest reason why gold jewelry is so expensive is that jewelry is expensive to produce. Gold coins also have a relatively high production cost, but jewelry is far harder to manufacture. Most gold coins are produced en masse after their original designs are created.
Gold jewelry is difficult to produce, and making quality jewelry requires several complex pieces of machinery. The small, intricate designs on most gold necklaces and rings should make it all-too-clear that gold jewelry costs quite a bit of money to bring to shelves.
The high production cost associated with gold jewelry is kicked back to the consumer, which is why gold jewelry is so expensive to buy.
Beauty
High production costs are one reason why gold jewelry is both beautiful and expensive.
Another contributing factor behind gold jewelry’s high price tag is its beauty. It’s impossible to deny how stunning many gold rings, bracelets, and necklaces are. The intricate, highly detailed designs used on popular gold jewelry products make them one of the most beautiful types of gold to buy.
Humanity has always loved gold jewelry. One of the earliest historical examples of processed gold is a set of gold jewelry items dating back to 4400-4100 BC. In nearly every civilization since the dawn of mankind, gold jewelry has been a signifier of wealth, prestige, and beauty.
Why is gold jewelry so expensive? The answer may be simpler than you think: gold jewelry is beautiful – and people love beautiful things.
Extreme Demand
The beauty of gold jewelry makes this type of gold product one of the most popular in the precious metal industry. Gold coins and bars usually aren’t purchased by anybody except investors. Gold jewelry is different. Gold jewelry products like rings and necklaces are often purchased as gifts for friends and loved ones.
Every year, around 2.8 million American couples get engaged. For the vast majority of these couples, gold jewelry is an absolute must. Even if we don’t consider the massive engagement ring industry, gold bracelets and chains are exceedingly popular.
Record High Gold Prices
March was a record-breaking year for gold. Gold soared through several all-time highs throughout the month – and the bull run doesn’t seem to be slowing down. Gold is trading at over $2,350 per ounce as of today, so investing in gold has literally never been more expensive.
Gold jewelry will always cost more when the spot price of gold is high. Most gold jewelry is made with 14-18 karat gold, making these products less pure than many gold coins and bars. While a lower purity helps cut gold jewelry costs, expect to pay more for gold jewelry when gold’s price increases.
When gold prices are low, gold jewelry is cheaper to buy. But when prices reach record heights, investors should expect to pay far more for their gold jewelry.
Is Gold Jewelry More Expensive Than Gold Bullion?
Barring a few exceptions, gold jewelry is more expensive to buy than gold bars or coins. The high production costs, extreme demand, and exceptional beauty of gold jewelry makes it one of the least affordable ways to invest in pure gold.
Gold jewelry’s high price doesn’t make it a bad investment, though. When we say that gold jewelry is expensive, we mean that investors will typically pay a higher premium for these products than they would for pure gold bullion. Gold jewelry also carries significant numismatic value. This means that, when you sell gold jewelry, you’re also going to receive more than the melt value of the gold it contains.
If you’re purchasing gold as a gift, gold jewelry is probably the best option out there. Even if you end up paying more than its gold is worth, a gold ring, bracelet, or necklace can make an unforgettable gift for a friend or loved one.
How to Find Cheap Gold Jewelry
Gold jewelry might be expensive, but it is possible to save some money if you’re willing to do your research before buying. To find cheap gold jewelry, investors should focus on bullion content, compare prices, and avoid high demand months.
Buy For Bullion – Not For Beauty
Vintage gold jewelry is far more expensive than most modern pieces. Whether you’re looking for rings, bracelets, or earrings, antique gold jewelry will almost always sell at outrageous premiums over spot price.
To save money when buying gold jewelry, search for items with high gold content and low premiums. Typically, you’ll find this type of jewelry at gold dealers rather than jewelry stores. Hero Bullion sells a smooth gold bullion bracelet at a fraction of the premium you’d pay for an ornate bracelet from a jewelry store.
Investors in the market for cheap gold jewelry should compare prices to find out which products give them the most gold for their money.
Compare Prices Across Multiple Dealers
Regardless of which type of gold you choose to buy, comparing prices across multiple dealers is essential to getting the best prices. Like we mentioned earlier, gold jewelry occupies a peculiar place in the gold market. Gold jewelry is valued because of its gold content, but it’s also a wearable product sold independently by jewelry stores.
Because of this, we recommend taking a look at gold bullion dealers and jewelry shops. Investors may find a better price for gold jewelry when shopping at a bullion dealer, but dealers also don’t typically offer the wide inventory you’d find in a dedicated jewelry store.
A small note: we’re mainly offering advice to collectors who want to buy gold jewelry as a gift or for personal use. Investors who want to speculate on the value of gold using gold jewelry should focus their attention on gold dealers. Gold dealers offer the best prices on pure gold jewelry, but they usually don’t sell the beautiful, ornate gold pieces that jewelry shops sell.
Avoid High Demand Months
To find cheap gold jewelry, we also recommend avoiding months where demand is likely to be especially high. In particular, investors buying gold jewelry before Valentine’s Day or Christmas are at risk of paying higher-than-usual premiums.
For most Americans, high demand months for gold jewelry include most major romantic holidays. Obviously, demand for gold jewelry spikes in February when men search for rings, bracelets, or necklaces for their loved ones. Avoid buying gold jewelry in early February to ensure you can get the best deals possible.
Gold jewelry also sells especially well in the lead-up to Christmas. Finding quality gold jewelry for cheap right before Christmas can be nearly impossible.
By avoiding high demand months, investors can score gold jewelry for cheaper than they’d find it right before major gift-giving holidays.
When is Gold Jewelry Cheapest?
On the flip side, jewelers may be eager to sell excess gold jewelry after these major holidays. Investors looking for cheap gold jewelry should try to time their purchases during periods of deflated demand.
Many experts recommend buying gold jewelry in March, April, or May. These months fall right before engagement ring season begins, so demand for gold jewelry is usually lower during this three-month period. This isn’t always the case, so make sure you shop around at multiple dealers before settling on your next gold jewelry purchase.
As a general rule, your goal as a budget gold jewelry buyer should be to avoid the crowds. In the lead-up to major holidays (or engagement season), jewelry dealers increase prices to account for inflated demand.
Best Alternatives to Gold Jewelry
Gold jewelry can make a fantastic gift, but it’s also one of the most expensive ways to buy gold. People buying gold jewelry for friends or family usually don’t care much about resale value. Gold jewelry can sometimes hold value, but the buy-sell spread of a given gold jewelry product depends on its design, rarity, and condition.
But for budget investors, gold jewelry comes with a couple of major downsides. The biggest con to buying gold jewelry is cost. Gold jewelry is often sold at a significantly higher premium over spot price than other gold bullion products.
When investors wear their gold jewelry, it can also depreciate in value over time. By comparison, carefully stored gold bullion almost never depreciates.
Gold bars and gold coins are two affordable alternatives to gold jewelry. While high gold prices mean that these products are still very expensive, expect to pay a much lower premium buying gold bullion than you’d pay for quality gold jewelry.
Gold Bullion Bars
For budget-oriented gold investors, gold bars are probably the best alternative to gold jewelry.
Gold bars have always been the product of choice for budget gold stackers. Since gold bars feature simple designs and are cheaper to produce than gold coins and jewelry, they’re also usually less expensive to buy.
To find the cheapest gold bars, we recommend going large. In the precious metals industry, bigger gold products are typically sold at lower premiums than small bars or coins. Even if you can’t afford a giant 1 Kilo Gold Bar, buying gold bars can save you hundreds of dollars on premiums compared to gold coins or jewelry.
The main downside to buying gold bars is that they don’t offer the beauty of gold jewelry. Gold bars also aren’t wearable and should be carefully, securely stored. Gold bars also don’t offer very much numismatic value – although there are exceptions.
Gold Coins
Another alternative to expensive gold jewelry is gold coins. Gold coins are sold at higher premiums than gold bars, but they might be less expensive than most gold jewelry. For gold stackers, coins are known for their numismatic value, purity, and beauty.
Gold coins can also make fantastic gifts. When consumers consider buying gold for their loved ones, gold jewelry is usually the go-to. However, buying an affordable gold coin might allow you to give your friends and family more gold for less money. Remember, though, that gold coins are also sold at high premiums over spot price.
Gold Jewelry Vs. Gold Bullion: A Comparison
Gold bullion coins and bars are different from gold jewelry in a few different ways. Below, you’ll find a comparison between gold jewelry and gold bullion.
| Gold Jewelry | Gold Bars and Coins |
|---|---|
| Higher Premium Costs | Cheaper Premiums |
| High Numismatic Value | Numismatic Value Varies |
| Beautifully Detailed | Designs Vary |
| Sometimes Holds Value | Almost Always Holds Value |
Is Gold Jewelry Worth the Money?
Gold jewelry can sometimes be worth the money, but it depends on your investment objectives and preferences. If you’re purchasing gold for a marriage proposal or another special occasion, jewelry is the standard for a reason.
But seasoned gold stackers know that gold jewelry is notoriously expensive. The cost of producing gold jewelry, demand from gift-givers, and market conditions make gold jewelry one of the most expensive ways to invest in gold.
If investing is your main objective, consider cheaper alternatives to gold jewelry – such as gold coins and bars.
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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.