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Why Filipinos Should Invest in Gold Accessories and Provide Valuable Possible Tips on How They Can Acquire One

Why Filipinos Should Invest in Gold Accessories and Provide Valuable Possible Tips on How They Can Acquire One

It’s hard to talk about the evolution of economies and finance without talking about gold. Honored by ancient trading civilizations worldwide, it appeared in coins as early as 800 BC, and it has long been used in creating crowns, scepters, statues, and many other items of cultural significance. Governments also originally used the “gold standard” to back the value of paper money. Because gold has been valued and treasured so much throughout history, a lot of people think about getting into gold jewelry investment in the Philippines. Many pawn shops accept jewelry, after all, so it must be a good idea, right?

Well, it actually depends on what you want from your investment. If you want a hard asset that can be quickly exchanged for cash during emergencies, then jewelry is worth considering. But if you’re expecting to make money, there are a few things you have to learn.

Why is Gold (Not Gold Jewelry) a Good Investment?

A lot of finance experts recommend gold investment for several reasons, many of which relate to its value. Unlike many other commodities, gold tends to retain its value over long periods; this is especially important during times of financial uncertainty and deflation, when the risk that assets will lose their monetary value is high. It often outperforms other products on the financial markets when political tensions and risks around the world are high. In times of inflation, when most prices rise, the price of gold also tends to rise. The global demand for gold, particularly in India and China, has been solid mainly for cultural reasons. Investors like it because its prices don’t move in the same direction as most other financial products like stocks or bonds, so it’s a good way to spread out their investment risk. And constraints and occasional reductions in the world’s gold supply tend to have a positive effect on gold prices.

The fact that gold is valuable leads many people to recognize gold accessories as assets. However, it’s not so easy to make a profit when selling jewelry. To understand why, you’ve got to know the different factors that go into jewelry appraisal.

 

Weighing the Shine and the Sparkle

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A lot of people may be surprised to learn that most gold accessories are not made of pure gold. Despite being a metal, gold is very soft. A ring that’s 100% gold, for example, can’t withstand the day-to-day abuse that comes when you wear it. Instead, most gold jewelry pieces are made of alloys; the gold is mixed with other metals, such as copper or silver, which makes the final piece beautiful yet durable.

When you hear a jeweler say that a piece is made of 14-karat gold — that’s the most popular gold-jewelry alloy in the US — that means the metal is made of 14 parts gold out of every 24 parts, which means it’s 58.3% gold. Higher-quality pieces can have 18-karat gold or 75% gold; low-quality pieces can be cheaper because they have 10-karat gold. Note that in eastern markets, gold jewelry tends to be sold in higher purities, with Middle Eastern consumers favoring 21- or 22-karat gold, and many others in East Asia being partial to four-nine gold, or pieces that are 99.99% pure.

What about the other components of jewelry? Many gold pieces contain not just gold alloys but also precious stones. Diamonds as well as other gems are appraised based on the 4 Cs: cut, clarity, color, and carat weight. The presence of a precious stone could significantly add to the value of your piece. Just a side note if you’re buying: jewelers can deceive consumers using tricks like using fillers or making gems seem larger than they actually are. But if you look for the right certifications and ask the right questions, you should be fine.

Counting the Human Element

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Not all jewelry are created equal. Like many other luxury goods, jewelry derives a big chunk of its value from the quality of the handiwork. Certain details like the symmetry and shape of a pendant or how well a stone is set into the bezel of a ring can add a significant premium. Pieces that came out of a particularly significant artistic movement, or were created by a well-renowned craftsman or producer, tend to be valued more. However, you usually don’t expect anyone other than a specialist or historian to appreciate factors like those.

Certain pieces can also fetch a higher price based on their previous owners; something that previously belonged to a celebrity is almost certainly more valuable than a similar item that was never owned by a famous person. But if you want to sell something you think used to belong to someone of influence, you’ve got to have some recognizable and verifiable evidence to prove it.

It goes without saying that the condition of the piece is a factor. Any sign of tarnishing, fractures, and other types of damage from neglect typically counts against the value of the piece. The state of preservation matters especially for old pieces; for example, if you have a fifty-year old item that’s in near-mint condition, it should get a higher appraisal.

Value is in the Eye of the Beholder

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Now, the resale price of gold jewelry depends on where you sell it. If you sell it to a jeweler, they are more likely to consider not just the purity of the gold in the item, the quality of any stones it contains, and signs of quality craftsmanship, but also its condition, cultural significance, and history. If you go to a place like Palawan Pawnshop, the shopkeepers can probably only make you an offer based on the most basic considerations; compared to specialty stores, pawnshops are generally not as well-equipped to factor the specific history of a piece into its value. On the plus side, you’ll be able to get cash more quickly and easily from a pawnshop.

You also have to remember that whether it’s a jeweler or a gold jewelry pawnshop, you’re dealing with a business. It’s not in their best interest to make an offer that’s close to the original purchasing price. If you bought a piece from a retail outlet rather than through the private collectors’ market, the price you originally paid would have included marketing, insurance, and other overhead costs, and no jeweler or pawnshop would want to include those original factors in their appraisal.

If you’re selling an heirloom piece, jewelers and pawnshops may offer to buy it for more than your grandmother paid for it. The way inflation works, a well-preserved item will almost certainly have appreciated over the decades; a ring that was worth 100 pesos back in the day could be worth fifty to a hundred times as much now. However, those shops may also consider the liquidity of that asset — that is, how easy or hard it will be for them to find another buyer who’d pay for it. The longer they think it will take for them to sell it again, the less cash they’ll want to offer you.

Conclusion

Gold jewelry is certainly valuable, and you can definitely use it as a store of wealth over time and something to possibly pass on to future generations. In addition, people can easily get cash by pawning their gold items, especially if they go to a reputable shop. But that doesn’t mean gold jewelry investment is ideal. Just like any other investment vehicle or product, it really depends on the market, your personal financial needs, your time horizon, and your objectives.

 

Author Bio:

Jeanette Anzon

Jeanette Anzon

writer and editor for AdventureDweller.com.

She mostly write about home improvements, home guides and designs, and real estate investments.

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