Jewelry is bought for mainly two reasons: Sentimental sense of belonging and beautification. Gold has been the most coveted metal for centuries. Gold, however, adds the third reason, investment. Investing allows for one’s wealth to grow, however, unlike other investment vehicles such as stocks or bonds the risks of bankruptcy are minimum.
Buying gold jewelry has long integrated as part of many cultures over the eons and even today in most societies passing down of gold jewelry is a form of security. So far that in the South-Asian and Middle-Eastern families, the female members are given gold in various forms as part of her dowry and/or inheritance.
Buying Gold Jewelry As Sentimental Gifting
From as far as 4000 B.C., gold jewelry has been passed through generations and thus been a symbol of family, love and more important status, prestige, and accomplishment. The emotions attached to this jewelry, thus, make it a staple purchase. Sentimental family attachment to the jewelry makes it a prestigious heirloom piece for many. The middle-eastern and south-Asian markets have the most share of jewelry purchasing. India one of the biggest markets of gold jewelry with heavy gold-laden sets in different forms such as: necklaces, bangles, rings, nose pins, earrings, and anklets. The middle-east is the next biggest market of gold. It is not only the females that are gifted with gold jewelry but men also associate prestige with wearing gold.
Buying Gold Jewelry as Beautification
The value is added to gold jewelry according to the designs they come in. The finer the craftsmanship, the higher the prices and values. It adds beauty to the wearer and adds an extra sense of confidence. The prices of the jewelry vary according to the design and more often than not the demand is higher for the more beautiful pieces than the simple solid gold jewelry designs.
Buying Gold Jewelry As Investment
The global jewelry buying trends have steadily increased over the years and is expected to reach an all-time high with the market cap reaching $480.5bn by 2025. Gold is one metal that has always been the driving force behind economies and, until Nixon, exchangeable from currency. Even though currencies across the world are not backed by gold, gold still remains the backbone.
In comparison to other investment options, gold has the least risk attached to it. In any investment portfolio, stocks of gold balance out the risks presented by stocks of companies, bonds, etc. During a recession, or when the markets crash, the gold holds its value. It can also act as a better opportunity cost against failing company stocks or hyper-inflation. Investors in alternative assets with bitcoin to trade will be happy to know that they can buy gold jewelry with bitcoin if they wanted to.
Benefits Of Investing In Gold Jewelry
Investing in gold is two-fold and simultaneously gives the opportunity to increase in value as when prices of goods and services rise so do the gold value. Added to this the element of craftsmanship in jewelry, buying gold jewelry as an investment seems a no-brainer.
With the current state of world affairs and the imminent constant threat of war, making smart decisions with money is imperative to the financial survival of the future. Whilst the other options could mean losing all wealth, investments in gold may just prove to be the saving face. Where investing in business might give higher profits having no fallback plan might prove to be a crucially bad idea.
Gold, having intrinsic value has a generally upward graph with value risen from $400 per ounce to $1500 per ounce in the last two decades. Gold is an always in-demand metal as compared to silver or other precious gemstones. Another benefit of investing in gold is the next to none amount lost to depreciation. The precious metal is long-lasting and does not lose its value over time.
Even though the gold jewelry may not be as liquid as other investment options and might have some negative carry costs, it still holds a fixed placement in opinions of top portfolio managers and comes highly recommended in the elite circles of finance giants as well as by fund management. Though it is to note that buying gold jewelry for this purpose should be of at least 22-carat gold and more preferably 24 carats. This is so that the ‘breaking’ cost can be compensated with and the gold can be as pure for re-selling.
Not a form, as embraced in the western world as its eastern counterpart, gold jewelry makes for a great savings avenue. Other lesser-explored benefits of gold jewelry are exemption it has from taxation authorities and has almost no government checks on them. The carrying and traveling restrictions of such items, internationally, are very limited, giving freedom to the people of movement. But maybe the most beneficial of all, the transferring of wealth in the form of gold jewelry is also largely non-taxed in most countries.
All in all, with all these benefits, world history and even familial sentiments attached to gold jewelry, the only question remains, why not buy it? Given, most importantly, gold jewelry never goes out of style.
What’s My Gold Jewelry Worth?