Christmas is around the corner and a lot of people are planning on giving gifts of jewelry. A gold necklace or bracelet makes a tasteful gift for a loved one, but did you know that jewelry can also be an investment? Gold is one of the most stable assets in the world for storing wealth – and it has been for centuries. Bullion jewelry is increasingly attracting interest from gold investors and it may make a sensible holiday gift in your family this year.
First, it’s important to recognize the difference between fine jewelry and bullion jewelry. In the western world, unlike in places like India where jewelry retains its traditional role in preserving wealth, jewelry is a luxury good not necessarily connected to investments. But it does have real gold in it, and gold is worth money no matter what form it takes. This is fine jewelry, typically 14-18 karats, with a gold content of around 58-75 percent. Bullion jewelry is 22 karat and 24 karat gold; in the West, it usually takes the form of necklaces without much adornment, though Indian 22 karat jewelry can be much more ornate. It’s much closer to gold bullion in its purity content and you can trade it with a gold dealer at or near spot prices, making it a better way to store wealth.
Bullion jewelry is the kind of gold jewelry you can find at Silver Gold Bull, and we sell it because it makes sense as an investment option. Gold investors are drawn to bullion jewelry because it’s a discreet way to store and transport your wealth, whereas coins and bars are harder to transport and may have to declared at customs. There is also a history of bullion confiscation that some investors worry about; the last time gold bullion was confiscated in the United States was in 1933, and some worry that an economic crisis means it could happen again, especially in the form a bank bail-in.
If you’re familiar with the bank bailouts of 2008, bail-ins are being introduced to keep taxpayers from paying the bill when banks fail. Instead, it’s investors, and many are worried a bank bail-in could mean the confiscation of gold on their premises.
Bullion jewelry is an effective way to store your wealth in precious metals discretely, but many investors stick to gold bars and coins. You can check out our collection Canadian gold coins for Maple Leaf gold coins of various weights, not to mention special minted series.
One of the big differences between gold bullion and jewelry is the premium; when you buy jewelry, the premium is higher than it would be if you bought a gold coin or bar. You can find 22 karat gold necklaces at Silver Gold Bull for near-spot prices, but for “fine jewelry” (14-18 kt.) you’re going to have to spend more on jewelry, because of the way it’s made. Unfortunately, it’s a premium you won’t necessarily recover when you sell the jewelry, especially if you have to go to a cash for gold dealer, who will want to buy it from you for less than the spot price of the gold.