As a passionate collector and buyer of fine gold and platinum jewelry, I’ve often heard, "Gold Jewelry is an Investment!" And this sentiment rubs me a bit and has me wondering...Is gold jewelry really an investment? And why is this sentiment trotted out by well-meaning sellers when a customer is considering purchasing a piece? Let's explore.
Disclaimer - this is my opinion only and I am not shading others who don't agree with this perspective. As always, you do you. But for others who are interested in some dialogue and hearing The Fancy Rat's thoughts on this topic, here we are...
So, let's first cover the question, in general - Is gold jewelry an investment? The short answer - maybe yes but with caveats. While the allure of gold transcends generations, its value as fine jewelry as an investment asset isn’t as straightforward as it seems. Today, I’ll share my perspective on the pros and cons of investing in gold jewelry, not just as adornment but as a financial asset. And, on another note, I don’t want to conflate gold jewelry with gold bullion/ asset commodity. These are two very different things and often are discussed together to mean the same which could be even more confusing for jewelry collectors. So, as a word of caution, gold jewelry is not the same and should not be viewed the same as gold bullion/ gold as a commodity.
Definition: Before we get into the meaty part of the question, let's first define the term, "investment." Per Merriam-Webster, the term investment is defined as follows:
Investment: the outlay of money usually for income or profit : capital outlay
Already, the term seems troublesome for new, antique and estate fine jewelry, from a customer's perspective. Are you purchasing jewelry solely for income or profit? Perhaps a few collectors are doing this who are not in the jewelry business. But the majority of clients are purchasing fine jewelry because it is something that they love and adore and brings joy in a challenging world (i.e., they are purchasing fine jewelry to wear or give as a meaningful gift to a loved one). Investment value is not often the first thing that comes to mind when purchasing fine jewelry. Note that this perspective around the term investment is from that of a collector, not dealer or reseller. Dealers and resellers purchase to re-sell so we need to look at our inventory as an investment.
Business Perspective: As a jewelry dealer, antique, vintage and fine jewelry is an investment. It's an investment in the business. I am purchasing pre-loved jewelry to resell for a profit. And if I do not purchase jewelry appropriately, meaning I purchase items without any way to earn a profit, then it is a losing endeavor and not an investment (a loss to the business). Of course, this is a simplified description of this endeavor and there are many other scenarios around successful buying/ selling of fine jewelry but that is not the intent of this article.
The Term "Investment" in Sales Dialogue: In general, I feel that it is a disservice to my dear jewelry clients to tell them that buying solid gold or platinum or other precious metal jewelry (of any kind) is an investment without any kind of additional explanation, deeper discussion or context. Meaning, I don't lead with, "buy this fantastic heavy gold bracelet because its an investment..." And here's why...
- Investment Measurement: If you did buy the jewelry as an investment, what is the measure by which the piece of jewelry appreciates in value and what is your time scale for a return on that investment? The price of gold, diamonds and semi-precious gemstones constantly fluctuates and is not predictable (it is worth noting that gold as a commodity has historically performed well over the last 20 years, but past behavior is not always a predictor of future success). So, that can't be used as a measure. And if you are lucky enough to have purchased an amazing piece below the melt value of the precious metal today and the price plummets tomorrow, below what you paid for it, your investment has lost value. But, how often does a seller price their merchandise below melt value (assuming selling to a collector)? Could and does happen, but is not typical for the average jewelry consumer. And if the item is currently priced below melt when the only purpose for purchasing it was for melting later, not wear and enjoy, what happens when gold goes down in value? And can you find an outlet that will pay you a decent % of melt for your item (because, in most cases, you will not be paid 100% of the melt value)? If you want to invest in gold, maybe bullion is a better option.
- Reselling: Tying into the above point, how likely is it that the piece you recently purchased from a dealer will be bought back by that same dealer at a higher price than it was sold to you? Odds are, this is slim to none. At best, depending upon how much time has elapsed since the piece was purchased and in a favorable market, you may be able to convince the dealer to purchase the item back for exactly what you paid for it, but this is still unlikely. An exception to this could be when an heir decides to sell jewelry that has been passed down. But, you're most likely not around for this, so it is no investment to you in the present moment.
- Jewelry Trends: What happens if that watch chain you love so much falls out of fashion as a necklace or bracelet? It's worth noting that jewelry trends come and go. A neckstack with multiple charms and dangly bits is currently de rigueur for any jewelry social media darling, but that may not always be the case. So, I am throwing up the caution flag on jewelry trends. What was once hot and drove the price higher, could cool with lower demand as trends and styles change. Georgian jewelry is an example of this - this era of jewelry was hot years ago and has since cooled a bit (if you are a Georgian jewelry lover, no offense intended). That item you paid a premium for because it was trendy is now worth less and perhaps was not a great investment if you were expecting a return today. Of course, if you still adore the look then you'll continue to rock it, but that has nothing to do with investment. Enjoyment value does not track with investment value.
- Condition: How about the wear and tear on your jewelry investment? If you are wearing it, then there will be signs of that which will impact the value of the piece, no matter how delicate you are with the item. And if the piece is damaged, irreparably, then the value will most likely only be in the components of what is left of the piece (i.e., gold melt value, stone value, etc.).
Now, because I am a true contrarian and I appreciate multiple perspectives, I also want to offer a few additional points to consider under the guise of purchasing jewelry as an investment. If I scored a legitimate David Webb panther bracelet at a steal price and offered it at a steal price, that just might be an investment to my client.
- Important Pieces: Some important antique, vintage and estate jewelry is an investment. How about Elizabeth Taylor's jewelry that went up for auction? How about Marie Antoinette's jewelry that went up for auction? But the difference here is that the provenance of the item is where the value lies and not just in the value of the jewelry item itself. So, if you have a piece of important jewelry worn by someone famous or important, odds are that could be an investment.
- Rare Gemstones and Signed Pieces: Some signed antique, vintage and estate jewelry with rare colored stones are also an investment. Do you have an excellent quality natural red diamond, over a carat, that you purchased many years ago? If so, that thing is probably worth a boat load (the last red diamond I saw sold for over $4M for a 1.5 carat stone - an obscene price for most of us). How about true Art Deco pieces, signed by Cartier or Van Cleef & Arpels, that were passed down in your family? If those items were purchased over 50+ years ago, odds are those are a good investment that will see a return as they are in high demand and enough time has elapsed from when they were first purchased that the original purchase price is inconsequential today (hello, inflation and demand). The prices on some rare, signed Art Deco jewelry (because original Art Deco jewelry remains a strong trend) continues to climb.
- Investment over Time: In a long enough timeline and with jewelry trends that are popular, the jewelry that the average customer purchases today could see a return. But this will depend upon the initial purchase price of the item, its rarity and favorability in the marketplace, the condition of the item, the value of the precious metal, and many other factors. I purchased a Tiffany Elsa Peretti 18k gold scorpion pendant necklace over 15 years ago. I paid around $1700 for it back then - today, it's on their website for $6900. So, if I wanted to resell this necklace (which has not been worn often and is in very good condition), I could see a return on that initial investment and get over the $1700 I initially paid for it. But I didn't purchase the necklace for investment - I purchased it because I loved it, still do, and will continue to enjoy her for many years to come.
- Sentimentality and Value to You: How often do we refer to what Aunt Dorothy paid for her amazing Art Deco Ring she wore everyday for the past 30 years? And do we think about its investment value? Yeah, we don't. We think about the significance of that ring to her and remember every time it glinted in the sun when she handed us a piece of candy or took our hand to play in the park. That piece of jewelry will hold memories that cannot be measured in dollars. In that sense, it will be priceless and the "investment" consideration is a moot point anyway.
So, jewelry as an investment is possible under specific circumstances and/ or in a long enough timeline. However, if your only goal is to purchase fine jewelry as an investment only, carefully weigh the pros and cons and all angles.
In closing, your motives for purchasing fine jewelry are yours alone - whether for investment or not. Purchase it because you love it, it sparks joy and makes you feel great, and it holds meaning. Or purchase it because you have a great connection that always offers legitimate gold jewelry well under melt. Or maybe its a combination of both and that's ok as well. I hope that this article provides some thought provoking points on a murky and controversial topic. As always, I would love to hear your thoughts! Comment below or drop me a line on IG.
*Note - I drafted this blog post months ago before gold soared to over $4700/ oz. With the ever-increasing price of gold, those steal deals you got years ago could be melted down at a profit to you today. Not saying you should do this, just saying that sometimes, it is an inadvertent investment. If I could have predicted the cost of gold today 20 years ago, I probably would be on my yacht somewhere in the Med right now.
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