Apart from the obvious reason that they are pretty and add a sense of confidence when you wear them, there is one more reason why most people are interested in buying jewelry. This is based around the idea that jewelry is a store of value and hence a lot of people look at buying jewelry as an investment, as a great idea.
If you are thinking if buying jewelry is a good investment, then this is the post for you. I have brought about the various perspectives which determine the future value of a piece of jewelry.
Does jewelry go up in value?
Looking at jewelry solely as a value proposition for the future, most generally, jewelry crafted out of precious metals, rare gemstones, diamonds etc, may or may not go up in value. This is driven fundamentally by the intrinsic value of these precious metals such as silver, gold, platinum etc. However , there are several factors which decide if a piece of jewelry holds, or increments its value over the years.
1. Metals/Materials from which the jewelry is crafted
2. Purity of the composing precious metals
3. Demand and Supply Dynamics of the Design and make of the jewelry piece
4.Ownership Vintage of the jewelry piece
Factors Affecting Jewelry Value On Resale
Gold Jewelry As An Investment
The most common precious metal used in making jewelry is gold, and everyone owns at least a piece of such jewelry. Gold jewelry has been prevalent in many cultures such as African, Indian, Chinese etc., as a way to exude wealth and social status. But can gold jewelry solely be looked at as a good investment option?
The answer to this lies in comparing gold jewelry to all other investment options such as real estate, stocks, bonds etc. Let’s explore this some more!
Is buying gold jewelry a good investment?
Gold jewelry can be looked at as an investment , from two different perspectives. As a gift bestowed upon a loved one or oneself perhaps, gold jewelry is a great investment, which will reap returns in the form of increased happiness, self-esteem and love.
However, in a true financial sense of the word investment, gold jewelry may or may not prove to be a good investment. It largely depends upon the designer brand from which the jewelry is , that determines if the gold jewelry piece would retain or increase in value over time. Apart from this, it boils down simply to the amount of pure gold content in the jewelry, which determines its value.
The value of gold jewelry has two components of it :
1. SUBJECTIVE VALUE : This is the component of the total value of a jewelry piece, which is attributable to the current brand value of the maker, design of the jewelry piece, the craftsmanship and the current demand for such a piece. This value is subjective to the demand and supply dynamics of not just the specific piece of jewelry, but also the brand value of the maker/marketer.
2. INTRINSIC VALUE : The intrinsic value of any piece of gold jewelry is equal to the value of gold in it. The value of gold in a jewelry piece can be simply computed by knowing the weight of gold in it, and the purity and its current market price.
Say you have a 14 karat gold chain weighing 1.2 ounces in total, and you want to calculate the intrinsic value of the chain(which is equal to the value of gold in it).
Is 14k gold jewelry a good investment?
As we have ascertained from the table above, 14 karat gold is only about 58% pure gold, and the rest being other alloys and added metals. So what does this mean for the investment proposition of a 14k gold jewelry piece?
A 14 karat gold jewelry piece is only 58% pure gold, which means that the intrinsic value of the jewelry piece would be way less than the actual price increase seen in 24k gold in the long run. This is why 14k gold jewelry is not a great investment option, and it is more so used to craft daily wear jewelry.
An added advantage of 14k gold jewelry however is that it is lustreous and yellow enough to look like actual gold, in addition to being sturdy than high karat gold jewelry variants. This gives jewelry makers a chance to cast them into some exquisite designs, which can give the subjective value of a 14k gold jewelry piece a boost in the long run.
Is 10k gold jewelry worth buying?
Absolutely! 10 karat gold may be way low in purity (10/24=41% pure), but it is way more sturdy owing to other hard alloys making up the remaining 60% weight. This is why buying 10k gold jewelry simply from a gold appreciation perspective may not be wise. But this can be used as the ideal mounting base for precious diamonds, and make the overall jewelry piece last longer.
Silver Jewelry As An Investment
While is the most prevalent metal for crafting precious jewelry, silver is the best option when it comes to investing into affordable jewelry pieces. Not being as expensive as gold both fundamentally and also becasue of a less demand pushed market into it, silver might just be the investment you are looking forward to make in the form of jewelry.
But is silver jewelry as an investment, really what it promises to be? Let’s find out!
Does Silver have resale value?
Well yes, silver being a metal which is useful in making jewelry pieces as well as in many other applications which includes medical purposes, there is a value at resale that you can realise . But the absolute value that you realise will depend upon the form of silver that you are reselling .
1. Silver as Bullion
This may be in the form of bars , coins, candles etc. which are readily available for purchase at jewels as well as in commodity markets. As a bullion (raw metal), you can expect to earn back the spot price of silver(less any commissions on sale). Now if the spot price of silver has increased between the time you bought it and the time when you are selling it, you stand to make a profit on resale.
2. Silver in the form of jewelry/accessories
Accessories and jewelry pieces are generally crafted out of either sterling silver or .925 silver. Both these variants have traces of silver in purity, which is predominantly to make them strong and sturdy for use. Since the extraction of this low silver content from these jewelry pieces will require extraction and benefication procedures, there will be an overhead incurred by the purchasing party to use the silver again. This overhead will eat away into your realised profit. This is why silver jewelry pieces and other accessories will sell for their scrap value – about 30-50% of their actual market value on the day of resale.
Silver Variants Used In Jewelry
Even when used in jewelry pieces such as bracelets, necklaces and bands, not all silver pieces will fetch the same resale value. This is owing to the varying purity of silver content in the jewelry pieces .
Below, I have compiled a list of silver variants, along with their purity contents. The list is sorted from highest resale value to the lowest.
|SILVER VARIANT||PURITY %(Percentage Amt. of Silver Content)||OTHER CONTENTS||QUALITY STAMP||PROPERTIES||USES|
|Fine silver(.999 Silver)||99.9%||Up to 2 Trace Elements||.999 FS / .999||- Softest form of silver put to commercial use|
- More lustrous than sterling silver polish.
|- Limited use in jewelry
- Used to make coins, bars for keeps
|Sterling Silver(.925 Silver)||92.5%||Predominantly Copper||925 STG/.925||- Has a silver lustre, but harder than Fine silver|
- Quality standard for silver across the world
|- Used in making jewelry pieces, decorative items
- Rhodium polished( from Italy) is resistant to early tarnishing
|Argentium Silver||92.5%||Copper and Germanium||Argentium(R) stamp/.925||- Germanium makes it increasingly tarnish resistant, compared to Sterling Silver||- High end jewelry pieces|
|Coin Silver||90%||Copper||.900||Has the name as it was historically made from scrap silver coins||Accessories and some chunky silver jewelry|
|Silver Filled||Very Low(below 10%)||Brass core with 5-10% Sterling Silver, along with a Sterling Silver coating||-||Layered metal, so can not be cast||Fashion Jewelry|
|Nickel Filled||Nil||Copper Nickel and Zinc||-||Has no silver, name only refers to the lustre and colour|
Apart from the ones mentioned, you will find many other variants of silver jewelry in the market. The below link will take you through these other variants and their value in the market.
Diamond Jewelry As An Investment
Does Diamond Jewelry have resale value?
Well going simply by the definition of a resale value, diamond jewelry does have a resale value and it will fetch you some bucks when you sell this jewelry . This is largely dependent on the brilliance of the diamond as well as the cut of craftsmanship which has been brought into it. However , what can cause impediments in reaping a good resale value out of a diamond is the fact that there is no standard scale of measurement of diamond quality, and it may be subjective from buyer to buyer.
When it comes to judging the investment or resale value of a certain piece of jewelry, it boils down to two things – the value of the content and purity of the metal used in the jewelry, and the value of the craftsmanship rendered into it. It is the latter one which is rather subjective and more a gray area when perceiving its fare out in future. In this sense, investing in bullions and pure precious metals will serve you as a better investment, than the jewelry piece itself.
If you liked this one or want to explore other dimensions to the idea of jewelry as an investment, do write to me and I will be happy to enrich this. Keep dazzling!