Is buying gold jewellery considered a good investment?

In today’s environment, be it as an conscious Gen X consumer or an aspiring Gen Z individual, you will be interested in the topic of investing. Investing is important, as it helps us to retain our wealth and is an effective way for us to put our money to work and potentially build income. There are many ways to invest – be it stocks, bonds, commodities, mutual funds or even cryptocurrencies, but would gold jewellery be considered as a good form of investment?

In ancient societies, gold jewellery has been used as a popular form of adornment, especially amongst the most wealthy and powerful people. Gold was highly valued for its beauty, rarity, and durability, and is often used to craft intricate pieces of jewellery that were worn by men and women, to signify power. At the same time, it was also used as a transference of wealth, where gold jewellery is often part of an heirloom handed down from generation to generation.

Today, gold jewellery is often associated more with its aesthetic appeal and design. However, if we were to evaluate it strictly within the scope of an investment – which is an asset acquired with the goal of generating income or appreciation, we do see that it actually fits rather well within it.

Reasons why gold jewellery is a great form of investment:

Gold jewellery retains its value over time

Gold is an excellent investment, because when you purchase 916 gold or 999 gold jewellery, the price of the jewellery is largely pegged to the prevailing gold price at the point of purchase.

This means that as the value of gold goes up, the value of your gold jewellery follows suit. While it is impossible to predict the short-term fluctuations in gold price, on a long-term basis, the value of gold has consistently performed as an appreciating asset.

Gold jewellery is an excellent hedge against inflation

As a safe-haven asset, gold also performs particularly well under high inflationary environments. Isn’t it great to know that the gold jewellery you purchased to wear and adorn, is also helping you to preserve value in difficult times of economic strain?

According to a study by World Gold Council, utilizing data since 1971, gold has returned an approximate average of 15% per annum when inflation has been higher than 3%. When inflation has been sub-3%, gold has returned on average just over 6% per annum.

Gold is an extremely durable precious metal

It is important for your asset to be long-lasting in nature. This allows for you to keep it in the same condition, for you to sell it at a higher price in the future. Gold is a non-ferrous metal, and its highly unreactive to environmental elements. This means it does not tarnish nor rust and can stay pristine for years to come.

As such, gold jewellery is extremely durable and will last for a long time if you take good care of it. Not only this, gold jewellery tend to be quite evergreen in trend. This means that if you choose a proper design for your gold jewellery, you can continue to wear it and stay fashionable for many years to come.

Gold jewellery is physically portable

Compared to stocks, bonds, ETFS or even cryptocurrencies – many of these assets are held digitally or in paper. In the event of an unforeseen circumstance which requires you to physically relocate, there is no other medium of investment aside from gold jewellery which allows you to quickly bring wealth from a place to another.

Because gold is a liquid asset, it is also easy to pawn your gold jewellery at reputable pawnshops for immediate sales and exchange of money.

Gold jewellery bears with it sentimental value

Unlike other forms of alternative investments, gold jewellery is often not only purchased with an investment purpose in mind, but also one with gifting and aesthetic purpose. Whenever gold jewellery is purchased, it is often gifted as a prized gift from loved ones and family members.

This means aside from the monetary value of gold jewellery itself, there is also important emotional bearings to it, which makes your gold jewellery purchase or gift priceless.

Countering potential arguments against gold jewellery as an investment:

Gold jewellery can be damaged

While it is true that gold jewellery can be damaged, this often refers to the jewellery piece itself, rather than the actual gold element. Because pure gold is extremely malleable (which allows it to be finely crafted to intricate beautiful pieces), 916 or 22K gold is stronger and more durable, and suitable for daily wear.

If your gold jewellery is damaged, you can also bring the parts to a jeweler for it to be repaired.

Gold jewellery often has high mark-up costs

Some articles or naysayers may deride gold jewellery as a poor investment, basing it off high markups from the jewelers themselves.

However, if you were to go to a reputable jewellery store like SK Jewellery, our 916 Gold and 999 Gold pieces have its workmanship prices in full transparent detail. This means you are able to know how much money you pay for the intricate and fine workmanship, which ultimately goes into the livelihood of the gold craftsmen.

The workmanship of a gold jewellery piece is based on the intricacy and complexity of its design. The more intricate and beautiful it is, the higher the workmanship fees involved.

Concluding remarks about gold jewellery as an investment

Ultimately, the purchase of gold jewellery should be seen as a multi-pronged decision, that encapsulates one of that of celebrating occasions, bearing sentimental and aesthetic appeal, and finally as a retention of value.

When it comes to investing, it is important to understand firstly what your key objectives and timeframe in mind are, before deciding on an investment asset. This should be done as a proper deliberate process, potentially with a professional investment consultant.

However, when it comes to having an investment asset that you can wear and bring strong emotional and aesthetic satisfaction to yourself, we feel that nothing beats gold jewellery! It is trendy, evergreen in style, and recognized as a valuable asset for thousands of years and many more to come.

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