How is buying gold bullion different from gold jewellery?

Metal Ounce Gram
Gold £1296.596 £41.686
Silver £17.578 £0.565
Platinum £767.656 £24.681
Palladium £1538.196 £49.454
Updated 06:15 22/10/21
Time Zone: UTC
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Gold is a standard hedge against any untoward economic situation, whether personally or globally. Commodities and cash can lose their value during a financial crisis, but gold will hold its value. That’s one reason why people have loved gold throughout human history. As an investor, you have several options to invest in gold. The most obvious and popular choice is gold bullion that comes in several forms and values. The gold price is based on its weight, purity, irrespective of its form.

Yet, some people compare gold bullion with gold jewellery and wonder if trading the two is different? So here’s the actual story.

Before buying gold jewellery or gold bullion, you need to understand a few things.

Gold quality on offer

You can be 100% sure about the gold quality when you’re at the shop to buy gold bullion such as bars or coins. This is because Government Mints and private refineries mainly focus on producing gold bullions with 99.99% purity.

In comparison, gold jewellery does not always guarantee high gold quality. Whilst some jewellery may be made from solid gold, others are gold-plated. And the rest are just metal allows. If you’re a respectable jeweller, chances are you’ll get all the information regarding gold karat, production location, etc. These things will help you determine gold purity in the jewellery. The task becomes equally tricky if you buy gold jewellery from a pawn shop or an individual.

Gold price

Gold prices, like stock prices, vary throughout the day according to the prevailing market conditions. The dealer will lock the spot price when you place the order or begin your payment process.

Buying jewellery depends on many factors, unlike gold bullion. The factors, in particular, can be the number and type of stones, gold karat, jewellery design, etc. Even the age of the jewellery can define the price as many turn into collectables.

In contrast, gold bullions hold no sentimental value and remain unaffected by fashion trends. So, the gold bullion price mostly remains stable, affected only by market conditions.

Worth

Gold bars and coins can hold their value over time when compared to gold jewellery of similar value. However, as it is easier to mould and cast the gold into shapes than creating jewellery, gold bullion resale value is different from jewellery. On top of it, gold jewellery prices consist of labour charges and other additional costs that gold bullions does not have.

As discussed before, gold jewellery prices will also consist of stones in it, design, karats, etc.

Safety

While gold jewellery and gold bullions add to your investment, jewellery has its liability issues. When you wear it in public, people take notice, and sometimes you get unwanted attention. Even when kept safe, gold jewellery is a more vulnerable target than gold bullions. Why so? Because people understand it is much easier to sell gold jewellery than selling gold bullion.

Concluding note

Gold jewellery is undoubtedly a good investment option, but it is better not to consider it a part of your portfolio. For this, gold bullion is a better option since it will hold its actual value in the long run, have proof of purity, and pose fewer liability issues. If you are looking for gold investment opportunities, consider RPS Gold in London. With a significant reputation in London and UK, RPS Gold is regarded as the formidable gold dealer with the best prices globally.