[quote=deadzone]I see where you are coming from. Jewelry as a collectible would be more desirable and is quite rarer in more than 14K. And unless you own a retail jewelry store you can’t benefit from the large markups that you get from selling 10K and 14K pieces
But from a pure gold melted down value point of view, there is no difference in price (in theory). In other words, an 18K bar is worth the same proportional value 18/24 of the spot gold price as 14K (14/24). But since 18K bars are probably not very common, there may be a slight additional markup but it wouldn’t be much.[/quote]
In theory, yes… but in practice, from you, the retail buyer of jewelry…. how do know how much gold is really in the jewelry and that it’s actually 14k or 10k, and not less? Many retail jewelry pieces don’t actually state the total weight of the gold part, especially cosmetic/affordanble/non-investment grade jewelry. How do you properly evaluate of the total retail price you pay for a piece of jewelry, the percentage of it is for the gold content, and the rest just a markup for the aesthetics?
Because in many cases, the markup for the non-gold content is significantly more than the price of the gold content, and if the worth of the consumer grade jewelry selling back is only the gold’s meltdown value, you’re going to lose the value from the piece’s aesthetic. For example, if you buy a necklace with that has gold and other decorations on it, and they don’t give you a total weight of the gold content, you might end up spending say 50% for the gold content and 50% for everything else. Melt value might only be for the gold content, which is worth only 50% of the total price of the piece…so just to come out even (non-inflation adjusted), gold prices would have to double from the time you purchased the original piece. That’s not a good “investment”…
There’s a difference if there’s some collectors value for that jewelry. But most 10k or 14k jewelry is not collectible, since it’s meant for your average consumer as an affordable option.
Also, if you buy jewelry in bulk for “investment”, how do you test for the actual gold content? How do you really know it’s 14k versus say 12k or 10k? with 10k or 14k, weight tests aren’t that accurate by itself..Now, for a consumer jewelry that your spouse/significant other likes, it doesn’t really matter how true is the gold content is and its unlikely you’ll spend the time an money to get it checked out, since it probably isn’t a big deal. You spouse/significant other likes the piece and that’s all there is too it. But from a “investment” perspective, that’s a crappy proposition. Because you won’t really know what you are getting. That uncertainty is “investment risk”…
So from that perspective, I wouldn’t buy a consumer grade jewelry counting on it to appreciate or view it as an “investment” because all those factors. All that matters really is my significant other likes the piece, fake or untrue to the gold content or not.
There are reasons why if one is truly serious about gold bullion investing, one sticks with well know coins or gold bars. Because while it’s not impossible to make them fake,
1) value is pretty clear: 1 ounce of gold…
2) purity of well know coins are well known. Canadian maple leafs are 99.9% pure, whereas american eagles are 91.7% ..But total gold content is still the same…
3) there are a lot of test kits that while isn’t a guarantee, does reduce your changes of getting a fake coin, The fisch test kit is a pretty good test kit. And they are designed to work on the well known gold coins that our popular…
4) the amount of effort to make a fake gold coin that is almost indetectable using tungsten is not worth it versus doing this to a 1 kilo bar. So while it’s possible to make fake 1 ounce coins with tungsten, the effort for just 1 coin isn’t worth it. 1 kilo bars are different, because fakers drill out the center of the 1 kilo bar and fill it up with tungsten, and being the weight and characteristics are close, with a large 1 kilo bar, it’s far easier to fake…
Again, none of this matters as much if you’re spending like $1000-$10k on gold/jewelry/etc, because if things are fake or not up to spec or not properly evaluated, you’re at most out $1000-10k and probably doesn ot materially affect your overall financial situation. But if one is really taking up sizeable “investments” in gold where it makes a material impact on one’s financials (just like every other class of investment), it behooves one to make purchases without the tools to verify authenticity, because not checking for authenticity is a huge risk for your gold “investment”
