There is currently a high demand for GOLD in this economy. However, now there is a shortage of GOLD because people are hoarding them as a financial safe haven. The only other GOLD that is available is jewelry. However, I hear that jewelry has less value and don’t hold up as well as actual GOLD bullion bars and coins.
But with GOLD in such high demand would buying jewelry be sensible alternative?
Asked by:g-money
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No it would not. Jewelry has a huge premium over bullion price built into it for the design work, and you have no way of knowing the purity or weight of the gold. You buy jewelry to wear it.
Gold jewelry is marked up many times over.
Why are you buying gold at all? Gold is at an all time high, it has never outperformed the stock market in the long run, and you must house it and deal with selling it and paying fees to do so.
Invest in investment vehicles (stocks, bonds, mutual funds, etc.) not metal and other tangible substances.
This is what I found
Not as an investment.
The two reasons being that:
1. You are paying a portion of the price for the artistry in the jewelry.
2. It is not as liquid as bullion, in larger quantities because:
i.It is bulky – in terms of volume and space occupied it is much harder to store away
ii.It is fragile – relative to a bullion
iii.it is also easier to counterfeit – more pieces equal more opportunity to forgers and thieves to replace real gold with lower grade or fake
However if you were to say buy relatively small amounts it may be a good perk because it is in fact easy to pawn and transport/store
There are really two questions in your question.
(1) – Since gold is in high demand, and bullion difficult to come by, is buying fine jewelry an alternative means to extract the same results, from an investment perspective, as one could from investing in bullion?
(2) – Is gold jewelry a good investment, perhaps unrelated to the first question?
The answer to the first part is an unequivocal NO. In addition for paying for craftsmanship and artistry, you will assumedly also need to pay some profit to the jeweler (so they might keep their doors open). The places to which you would then sell the jewelry later would most likely purchase from you WITHOUT factoring those things in.
The answer to the second part is that jewelry can be a far better “investment” than other non-necessities you might purchase. Because of the materials from which fine jewelry is made, it has intrinsic material value (unlike high-end electronics, furs, or other items that are not necessary, and in the same price range). And, if the jewelry is truly art (particularly by a prestigious designer, signed, and numbered), it will be an investment akin to other types of artwork.