5 tips for buying gold jewellery then reselling it for a profit
Is there anyone in the world who doesn’t love gold jewellery? Gold pieces of jewellery are quite luxurious and glittery with great aesthetics, making them such a wonder to behold—both for men and women alike.
Whether it’s an anniversary, birthday, wedding or any other event, those expensive pieces of gold jewellery are enough to grab everyone’s attention. Apart from being a fashion accessory, gold jewellery is an investment that you can enjoy for life—and even pass on to future generations.
Many people purchase gold as a direct investment and earn profit by selling it whenever there is a massive increase in its price. For others, it considered a finite valuable ornament with near-limitless industrial uses. Well, whatever your reason for buying gold jewellery is, there’s always a demand for it and you can even buy gold earrings with bitcoin at many jewellery stores.
However, before you decide to buy gold jewellery, here are some important tips that would guide you if you plan on selling it for profit at a later time.
1. Be comfortable with how it looks
Once you’ve decided to invest in gold jewellery, be sure you like whatever design you go for. Various precious-metal retailers are offering different gold pieces from anklets to necklaces, earrings and wristwatches. Despite being an investment, you’d still want to enjoy wearing your gold jewellery after paying such a high price for it.
“If you’re going to buy jewellery as an investment, be sure it’s something you’d enjoy keeping and potentially wearing,” said Adam Koos, president and portfolio manager at Libertas Wealth Management Group in a report. “Worst case, if you can’t unload it, you’ve got something you can enjoy.”
Another thing to look out for is how much the gold piece weights. If you plan to not only wear the jewellery but sell it at a later time, you would need to be aware of its weight as this affects both its cost and durability. Just like gold bars, the heavier the jewellery, the more expensive the piece will be, especially the resale value.
Heavier and thicker gold jewellery is highly durable and can withstand years of wear and tear. There are lots of jewellers who often include other precious stones to gold jewellery like diamond, emerald and pearl, just to increase its weight. Therefore, you may end up paying for gold that isn’t actually there—something you should always consider when buying studded gold jewellery pieces.
2. Check the value of the material
In today’s jewellery market, there are both hand-made and machine-crafted gold ornaments. The cost of production for each one varies, and this can affect the price of the gold piece. Machine-crafted gold jewellery comes in various sophisticated designs, unlike hand-made ornaments. So, be sure of what type of gold jewellery your jeweller is offering before you invest in it. Many jewellery shops charge a higher making charge fee than— which is essentially the cost of labour in creating a gold jewellery piece—despite it being influenced by current gold prices.
The purity of a gold piece is another important factor to consider when shopping for gold jewellery. Carat or finesse is the measure of gold purity and the higher the carat, the more valuable the gold piece. 24-carat gold is 99 % pure gold, while 18-carat, 14-carat and 9-carat are 75%, 58.5% and 37.5% pure gold respectively.
However, the most commonly used alloys for jewellery in Europe are 18 and 14 carats, while 9 carat is popular in the UK. Places like Canada and the United States sell gold jewellery in either 18, 14 or 10 carats—as they don’t sell 9-carat gold. Note that no gold jewellery is 24-carat gold due to its high purity level.
While laws exist regulating the purity stamp placed on metals, having a testing kit can be very useful in verifying the purity. It is possible that the jewellery may have a higher value than the price of the precious metal in terms of both its design and the quality of the gems used. Most times, it’s best to get an evaluation of your gold jewellery by a reputable jeweller.
You also check for the hallmark which is a quality stamp of a metal’s purity. These marks confirm the origin and fineness of the gold and ensure it has been accurately and independently tested. In the UK, the hallmarking metal and fineness mark for 18-carat gold is 750 while 14-carat and 9-carat gold are 585 and 375 respectively. In the United States, a gold fineness stamp isn’t compulsory according to the Federal Trade Commission, but it must always go alongside the manufacturer’s mark.
It’s advisable to only purchase jewellery that is hallmarked since it makes it much easier to sell—unlike non-hallmarked gold where its purity isn’t authenticated.
3. Know the price volatility
Like every other investment, gold prices fluctuate and sometimes, wildly. However, considering gold jewellery as an investment can be quite tricky.
The rules of supply and demand apply to gold and if more people are investing in it, this skyrockets the price. You may want to buy your gold jewellery when the price of gold is a lot cheaper and not when the economy looks quite volatile—as gold tends to be in more demand.
Gold is often a safer investment than shares or stocks—and while you can’t wear gold bullion, you definitely can rock a beautiful gold necklace. Nevertheless, as with any other investment, it’s quite difficult to accurately predict future rises or falls in the value of gold.
Also, note that the Internal Revenue Service tags gems and metals as “collectables” and every profit made on the sale of gold jewellery is taxed at almost 28%, according to Lawrence Pon, certified public accountant at Pon & Associates.
4. Be sure to collect an invoice
Whether you choose to sell your gold jewellery in the future or not, retaining your invoice is important as proof of purchase and ownership. An invoice would typically contain the full details of the transaction providing transparency and assurance to the buyer.
Also, in the case of any dispute or discrepancy, having your invoice with you makes it a lot easier to contact the right authorities to resolve your case. The invoice should clearly capture the current price of gold on the day of purchase, the price paid for the jewellery, hallmarking information, making charges, and jewellery description such as colour, shape, weight, and carat.
You would need an invoice or purchase document whenever you want to sell your jewellery.
5. Confirm if there’s purchase backs
Most reputable jewellery stores offer customers purchase backs which essentially means they can trade in their old gold piece for either cash or new jewellery.
Gold remains valuable irrespective of changes in designs and trends; therefore, it is important to inquire from your dealer if they have a purchase back policy. That’s because most reputable jewellery stores will only buyback gold ornaments that were purchased from them and not other stores, even if you have the item’s bill.