Gold Jewelry

Gold Jewelry is one way to buy gold. It comes in many shapes and sizes but its value is based on its gold content and artistry. Artistry is a more speculative investment because beauty is in the eye of the beholder and much of what we hold as valuable to us will fail to elicit the same emotional response in others. Thus, from an investment perspective, less art and more gold is what an investor wants to look for. Gold Chains, for example, have minimal art and can have maximum gold. Gold Watches, on the other hand, have maximum art and may use minimal gold.

Gold Rings can fall into either category and may or may not contain a separately valued precious or semi-precious stone. Gold Bracelets can fall into the same category.

To understand gold content, you need to understand the karat system used by goldsmiths and professional jewelry manufacturers:


24 karat (24K) gold is pure gold.

18 karat (18K) gold contains 18 parts gold and 6 parts another metal or metals, making it 75% gold.

14 karat (14K) gold contains 14 parts gold and 10 parts another metal or metals, making it 58.3% gold.

10 karat (10K) gold contains 10 parts gold and 14 parts another metal or metals, making it 41.7% gold. 10k gold is the minimum karat designation that can still be called gold in the US.

Other Metals are added to gold to make it harder and more resistant to scratching or malformation. These can include copper or nickel or other metal like zinc. From an investment perspective, purity is everything. Most gold jewelry in the United States is either 14 Karat or 10 Karat gold. 24 Karat is popular in the Far East.

Many companies have formed that will buy your gold jewelry solely based on its gold content. These companies will melt down the jewelry and separate the gold from the other base metals. The gold is then reformed as ingots or bars and then sold off to investors.

Gold Content value changes daily. The "Spot Price" of gold is what investors will pay for one ounce of bullion. This is what you should use to calculate the value of the gold in your jewelry. The karat value is stamped on the jewelry itself on a part that is not visible to the human eye. It can also be verified with a signed certificate from the manufacturer.

One of the difficulties of melting gold down yourself is verifying its purity. Most gold resellers rely on professional "Asayers" to certify the purity and weight of the gold they sell to investors. Hiring a private "Asayer" is an expensive proposition and should only be considered when the amount of gold is larger than a few ounces.

Security should be a primary consideration when investing in gold. Most investors mistrust the system and want to hold the investment on their own. These individuals fear losses that may occur with economic or social destabalization. In reality, it is very difficult to store large amounts of gold in the average home. A safe may offer some protection from amateurs, but is nothing more than an inconvenience for the true professionals.

Please see: Storing Your Gold for home storage suggestions.

It seems that effective home storage is based more on deception and obfuscation than on the strength of any one safe. Most individuals that store gold also have a way to protect that gold from a forced home intrusion. Thus, gold and firearms usually go together.

A more elaborite security system might involve multiple storage areas so that the entire amount of gold is never fully at risk. The key is, loose lips sink ships. So, if you brag about your holdings and can't keep a secret, you are more at risk of the wrong people finding out that you have them. All it takes is one wrong person, and you can end up losing everything.

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Gold:

Gold is one of the rarest elements on the earth. As such, it is the perfect medium for exchange on the face of the earth. Gold has been used by almost every society as money and coinage. What makes gold so valuable is that it can not be replicated. Alchemists tried for centuries to make gold from other "heavy elements" like lead.

Gold is also a token of wealth. Monarchs, Wealthy Merchants and Aristocrats have used gold to ornament their hair, adorn their garments and as jewelry and art. Gold plateware was also used by the very wealthy at special banquets and feasts.

Today, gold is most popular in jewelry, like bracelets, necklaces and rings. It is no longer used as currency, but it makes an excellent investment none-the-less. Gold traded for $290 an ounce prior to 9/11 and that same ounce of gold is now worth over $850 and rising! That's almost a 300% return on investment! Compare that to any stock or bond investment and you will see that gold literally outshines them all!

Smart Investors know that gold hasn't even come close to its price potential. Paper currencies, like the dollar, have been gutted by over-printing which will lead to double-digit inflation and continuous loss of earning potential in the future. In fact, CITI financial came out and stated that gold will exceed over $2,000 per month as the dollar continues to loose its value.

Due to the fact that, the US govt. pays interest on its currency in gold to the Federal Reserve, a vast majority of gold holdings lie within the Fed's vaults and will never see the light of day. It takes 5 years to bring new gold mines into production, and even then, high-producing mines are almost non-existent. In fact, all of the existing gold in the world would fill a three story building the size of a tennis court!

Although banks can dump their gold holdings to bolster the dollar like they have done in the past, global insecurity simply means it is no longer possible for supply to keep up with demand! Amazingly enough, it is not a far reach to see one ounce of gold reach $5,000 to $10,000 per ounce when the dollar panic begins and trillions of dollars seek out a safe haven.

Consider all of the alternatives. Real-Estate, the most highly favored investment lost almost 30% of its value over the past few years and the search for a bottom continues. Because of a soft market, things will only get worst. Lower interest rates are often unreachable because of the difficulty of refinancing lower valued homes.

Lower Interest Rates have helped make existing bonds more attractive, but not even the best bonds are keeping up with inflation. In fact, the devaluation of the dollar will favor gold even more as foreign investors stay away from unstable government bonds and money market instruments.

We already discussed the stock market, but the bigger issue is the health of corporate America. Gold is no longer the hedge against the stock market. It is the only sound alternative. Earnings and Consumer Spending will only continue their downward spiral as the recession continues to worsen. Profits give corporate stocks their value. Lower profits will only force more and more investors into gold.

Then their is the gold jewelry market. While more and more individuals are selling their gold jewelry to generate immediate cash. It could be argued that just as many, or more are purchasing gold jewelry because they see it as a purchase that will keep, or even increase its value over time. Some countries, like India, also view gold jewelry as the best way to hold onto wealth during times of instability. If their is a better investment out their than gold, it hasn't presented itself.

To Learn More About Buying Gold: Visit Learn How To Invest in Gold

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