Are gold jewelry investments?

Many people possess gold jewelry to varying degrees, primarily viewing these pieces as luxury accessories. An important question, however, is whether this gold jewelry can also serve as investment gold.
 
We will compare the characteristics of gold jewelry with those of investment gold. Additionally, we will explore whether gold jewelry can be seen as a valuable investment, examining both the advantages and disadvantages of such an investment.
 

What is investment gold?

Investment gold refers to gold purchased with the intent of preserving or increasing wealth. There are several forms of investment gold, such as 24-carat gold coins with a purity of at least 99.5% and gold bars.
 
The tradeability and high purity of gold determine whether it can be considered investment gold. For gold to be viewed as a good investment, it is important that it is easy to trade and globally recognized.
 

Relationship between investment gold and gold jewelry

Gold jewelry differs from investment gold in several key aspects. The purity of jewelry typically varies between 14 carats (58.5% gold) and 22 carats (91.6% gold), which is lower than the purity of investment gold.
 
Furthermore, the market value of jewelry is influenced not only by the gold price but also by design, brand, and craftsmanship. The total value of gold jewelry is also affected by both its emotional and collectible value.
 
This means that in certain situations, jewelry can be sold at a higher price than the value of the gold contained within the pieces.
 

Purity of investment gold

Investment gold is characterized by its high purity, often 24 carats (99.9% pure gold). This makes it pure and easy to trade on the global market.
 
The purity of gold jewelry is significantly lower. For instance, 18-carat gold has a purity of 75%, and 14-carat gold has a purity of 58.5%. The intrinsic gold value of jewelry is therefore lower than the intrinsic gold value of the same amount of investment gold.
 

Advantages and disadvantages of gold jewelry as an investment

There are several advantages to investing in gold jewelry. It is wearable, has aesthetic value, and can hold emotional significance. Additionally, some jewelry, especially antique or rare pieces, can have considerable collectible value.
 
However, there are also disadvantages. The purchase price of jewelry often includes a premium above the gold price, incorporating design and production costs. This means the resale value of the jewelry can be significantly lower than the purchase price.
 
This is especially true if the gold price has not increased in the meantime. Another important factor is VAT. In most cases, no VAT is paid when purchasing investment gold, which is not the case when buying gold jewelry.
 

Historical performance of gold jewelry

Historically, gold jewelry has produced mixed results as an investment. While investment gold such as coins and bars directly benefit from rising gold prices, jewelry is also influenced by fashion trends, brand value, and the condition of the second-hand market.
 
In times of high gold prices, jewelry can perform well, but its value can be less stable compared to pure investment gold.
 

Future of gold jewelry as investment gold

The perception of gold jewelry as a form of investment gold may change in the future. While traditional investment gold remains attractive due to its purity and liquidity, jewelry can increasingly be seen as an alternative investment.
 
Growing interest in unique, custom-made, and antique jewelry can increase their value as investment objects. For investors seeking a stable and liquid investment, gold bars and coins are likely to remain the preferred choice.