There are plenty of questions new investors have when buying precious metals. One of the more common, however, is whether to buy gold jewelry or bullion. Both certainly sound like solid strategies since the yellow metal always holds value. Of course, there are some big differences.
While you’ll often hear the term “gold is gold” — even on this very website — varying forms of gold can have their own benefits and disadvantages. This is why it’s important to understand what you’re buying before beginning your investment journey.
At Silver Gold Bull, we know that an informed investment is a smart investment. The following information will help you achieve that endeavor. Gold jewelry and bullion may both be solid purchases, but one should stand out based on your financial goals.
When you buy gold bars and other bullion types, your investment typically varies significantly from jewelry. Before diving into the many differences, though, it’s important to realize that not all gold jewelry products are the same. In fact, this goes far beyond style and designers.
If you have a necklace or earrings containing the yellow metal, it likely qualifies as fine jewelry. Depending on the designer, it might be an elegant piece that grabs everyone’s attention. For those who buy bullion jewelry, though, the focus isn’t so much on aesthetics.
Fine jewelry pieces typically have a gold content ranging from 58% to 75%. This means most of these items fall under 18 karats. They often come with additional adornments or a popular designer’s name. This type of jewelry falls under the category of “luxury goods” rather than “investment.”
Of course, this doesn’t mean it’s not valuable. The designer’s name itself can hold worth. Additionally, the intrinsic value of the item ensures it will always be worth at least its gold content. This means even after you’ve grown tired of the piece, you could still make money back by selling it.
Bullion jewelry typically avoids the frill of fancy adornments. It usually comes as a necklace, and its gold content ranges from 22 to 24 karats. While it’s still often worn as a fashion accessory, its primary purpose is to serve as an investment.
If you come across gold bullion jewelry from India, you might get the investment along with ornate adornments. In most cases, though, these items are nothing more than a form of storing value. They typically trade near spot price, and pawn shops often melt them down as scrap.
Since bullion jewelry essentially falls into the same realm as traditional bullion, the rest of this guide will focus on fine jewelry. And while most experts will say coins and bars are better than necklaces and bracelets, there’s no denying that the latter two carry several benefits.
When comparing gold jewelry and bullion, a good fashion statement stands out in several ways:
Of course, even the glitter of gold jewelry has its disadvantages. This is why many investors pay more attention to bullion items like bars and coins. The benefits of these over necklaces and bracelets are many.
Excitement for gold recently grew so much that the U.S. Mint could not meet demand for bullion products. While people were certainly snagging jewelry pieces when they could, most focused on items like bullion bars and coins.
There are several factors that explain this reality:
These benefits are just the tip of the iceberg. If you ask any investor to choose between gold jewelry and bullion, their choice will center on bullion in most cases. Unless you want an expensive piece that’s likely to lose value over time, fine jewelry simply isn’t the way to go.
While the benefits of bullion over jewelry are many, there are still folks who would rather have rings, necklaces, cufflinks and earrings. If you fall into this category, it’s important that you take measures to make the most from your investment.
You may find yourself saying, “I don’t need high-end jewelry! Scrap holds the value I want!” Frequently, this is absolutely true. It’s particularly the case if you’re buying old precious metal items. Unfortunately, you won’t usually find these at reputable dealers.
Because of this, abide by the following rules when buying gold jewelry:
Gold jewelry and bullion can both be brilliant investments, but the risk in buying the former is much higher. There are far more reputable bullion dealers than secondhand jewelry sellers. And if you go the safe route of buying new jewelry, you’ll end up paying far more than an item’s intrinsic value.
If you venture into precious metals investing, there’s an obvious answer between bullion and jewelry. While the latter may carry added value based on its designer, there’s no guarantee that this worth will last. You could one day end up with a gold necklace worth a fraction of what you paid.
Of course, this is different with bullion jewelry. These items rarely carry the “frill” of fine jewelry items, and this means you can often purchase them for near spot value. Unfortunately, you’ll have an item with less liquidity than traditional bullion items.
At Silver Gold Bull, we want each of our clients to get the best deal possible. In the debate over gold jewelry vs bullion, this typically means a recommendation of the latter. Visit our Gold Bullion Products page today to get started on your journey of precious metals investment.
At Silver Gold Bull, our content is researched, written, edited and reviewed by a team of financial experts with decades of experience in the precious metals industry. With each piece we write, we bring our own personal experience and expertise, while combining that with today's leading research and data. Our ultimate goal is to help extend our award-winning customer service to our educational content. Ultimately, we want you to feel comfortable and informed when making investment decisions, regardless of whether that is with us or not. Thank you for being part of the Silver Gold Bull community. We really appreciate and value your trust in us.
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