Investing in gold chains and jewelry has been popular for a long time. While gold jewelry does carry value, there are several factors to consider when determining if it makes a good investment. The purity and craftsmanship impact the resale value. Storage, insurance and potential theft are also risks. However, gold retains intrinsic value, and chains let investors physically own gold. With proper selection and care, gold chains can be a reasonable addition to a diversified portfolio.
Gold purity critically impacts resale value of chains
The purity of the gold in chains and jewelry is critical to its investment value. 24K gold is pure but too soft for jewelry. 18K and 14K gold alloys add durability but reduce gold content and value. High purity 22K or 20K offers a balance. Hallmark stamps like KT or carats indicate purity. High purity gold has greater melt value and commands better resale prices.
Craftsmanship affects the premium paid for chains
The craftsmanship of gold chains also impacts resale value. Better made chains command a higher premium over melt value. Machine-made chains have lower premiums than handcrafted or designer pieces. Simple chains have lower markup than ornate links and pendants. Unique, antique and signed pieces can appreciate over time and have the best investment prospects.
Storing and insuring gold chains carries risks
Keeping gold chains secure against theft and damage comes with costs and risks. Home storage requires physical security or a safe. A safe deposit box provides security but no insurance. Getting insurance can be expensive. Chains worn frequently suffer nicks and scratches reducing value. The costs and risks of storage must be weighed against the investment upside.
Gold chains provide intrinsic value and ownership
The key upside to gold chains as an investment is the intrinsic value of gold. Its global value decouples it from single currencies. Gold prices fluctuate but have consistent appreciation and stability long-term. Chains let investors physically own real gold. Pieces kept in good condition hold value and are liquid. When part of a diversified portfolio, gold jewelry provides useful balance.
Gold chain jewelry has pros and cons as an investment class. While carrying risks, gold chains remain a reasonable way to own physical gold. With care and research, high purity, well-crafted chains can retain decent value and provide portfolio diversification.