Which Makes a Better Long-Term Investment: Gold Jewelry or Gold Bullion? - APMEX (2024)

• Published on February 2, 2023
• by APMEX

Is Gold Jewelry a Form of Bullion?

Gold jewelry differs from gold bullion. Bullion refers to gold and silver bars or coins certified as at least 99.5% and 99.9% pure. In contrast, gold jewelryis measuredin karats. For newcomers to the fine jewelry realm, understanding that 24K gold is 99% gold and 22K is 91% gold is essential.

Is Gold Jewelry or Gold Bullion A Better Store of Value?

Gold jewelry adds elegance to your attire and canappreciatein valueover time. However, pricing for fine jewelry involves more factors than gold bullion. Gold bullion may be preferable for those optimistic about gold’s future and seeking a straightforward investment. Bullion tends to offer a more reliable investment option due to lower retail markups compared to gold jewelry. When it comes time to sell, you are more likely to recoup your investment with gold bullion thanwithgold jewelry.

Jewelry subjected to wear mayhave its gold purity diluted with other alloys for reinforcement. Proper care is essential to maintaining its longevity. Conversely, bullion, often stored securely, maintains its condition over time without exposure to the same wear.

How Are Gold Bullion and Jewelry Valued?

Goldjewelry often holds value beyond its gold contentdue to various factors.In addition to gold purity,considerations such ascraftsmanship, design, and brand contribute significantly to a piece’s price. These elements collectively determine the overall cost of a product. In contrast, bullion is primarily valued based on its gold content and the spot priceof gold. Comparing bullion products of identical purity and weight is more straightforward as they generally fall within similar price ranges across different brands.

Which Is a Better Investment?

When purchasing gold, expect to pay a premium whether buying bullion or jewelry. Premiums for fine jewelry are typically higher than those for regular bullion investments. Craftsmanship and brand significantly influence jewelry prices, while the spot price of gold primarily drives bullion prices. Investing in bullion often offers better value for your money.

Yet, there’s a distinct allure for those who appreciate wearing and owning fine jewelry. Often, personal enjoyment takes precedence over investment returns. Gold jewelry can hold significant sentimental value, particularly when passed down through generations as an heirloom. While the melt value of gold jewelry may depreciate over time, the creation of a new family tradition or heirloom can hold immeasurable personal value.

Which is Easier to Sell?

Bullion offers greater liquidity compared to jewelry. Used jewelry is often perceived as scrap metal and sold for lower than melt value, posing challenges in selling it at a price equivalent to its purchase value.

Conversely, the value of gold bullion is determined by the spot price, facilitatingeasierprofit realization when selling gold rounds and bars. Gold bullion serves as a more liquid asset, swiftly convertible into cash.

Key Takeaways

Choosing how to invest in gold is a personal decision. There’s no definitive right or wrong approach as long as it aligns with your goals and priorities. It’s essential to conduct thorough research before making significant precious metals purchases to find the best option for your needs.