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Is Gold Jewelry a Good Investment?

Catherine Tramell
Catherine Tramell

Published August 23, 2021

Last updated October 27, 2022

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When precious metals investors think about gold, gold bullion (coins and bars) almost instantaneously comes to their minds. But when the layperson or regular buyer considers investing in gold, they immediately conjure images of gold jewelry in their heads.

buy gold jewelry for investment

People with zero investment knowledge or who do not invest in gold for a living put their money in buying gold jewelry hoping those jewels will act as an emergency fund after a few decades or when there’s economic uncertainty.

They see gold jewelry as a hedge or insurance to safeguard them from a financial crisis that may come about in a few years or when the bubble period is over. Real estate going down, the dollar value falling, and paper money becoming valueless are real threats.

However, the “investor” would see a gold piece or new jewelry purchase as an uninformed, unwise investment decision. Does that mean gold jewelry is not a good investment under any circumstance? Should gold coins and bars be the only option when buying gold with a purely financial perspective?

Let’s answer those questions and also discuss other aspects pertinent to the topic, which include:

  • The various types of gold jewelry.
  • The legitimate reasons to invest in gold or buy gold jewellery.
  • What do “karats” mean, and how are they relevant?
  • An insightful discussion on 24K gold in the jewellery form, and lots more.

Whether you are new to gold investment or someone who has decent knowledge about investing in gold or any tangible investment asset, this article will open the floodgates to nuggets of invaluable information that’ll be both enlightening and empowering.

Can Gold Jewelry Be a Good Investment?

Gold jewelry is something gold investors and industry experts frown upon. If given a choice, these “investing gurus” will pick gold bars and/or coins over gold jewelry any day of the year.

The biggest beef investors have with gold jewelry is its “melt value”. In other words, the gold scrap value in jewelry is less compared to a gold bar or coin of equivalent weight or price.

So does that mean gold jewelry is a “bad investment”?  Before answering that question, let’s try to understand what “good investment” is.

Read More: 9 Mistakes When Buying Gold

What is a “Good Investment”?

A good investment is any asset that offers a decent ROI (return on investment). And a respectable ROI is around 7% a year – provided the risks are moderate, such as with government bonds. If you invest in the stock market, particularly small-cap shares, expect at least a 10% ROI for the increased risk exposure.

So, what is the return on gold like? Unlike stocks and mutual funds, gold’s ROI is ascertained by the appreciation in value of the metal over a period. Historical gold returns between 1972 and 2020 have been less than 4% (adjusted for inflation), which is not anything to write home about. But that doesn’t make gold an impaired asset.

The ROI on gold is comparatively low, but the metal’s value has been relatively stable historically. Unlike stocks, gold prices have never been highly volatile. Investing in shares of a business is riskier, which means there is the possibility of losing it all if a company goes bust or incurs significant losses. Gold’s value may decrease, but it will never go defunct.

The Upshot

Gold jewelry is undoubtedly a good investment if you do not directly compare it to its bullion form, which most people who invest in gold tend to, unfortunately.  

As a standalone asset, gold is a lot more valuable than the automobiles, expensive gadgets, designer clothing, etc., that the rich usually spend their dough on. Gold jewelry is certainly more than just an accessory. And if gold prices reach unprecedented levels, your great gold jewelry possessions would be worth more than their original price.

There’s no denying that you pay a premium for the artisanship and labor that goes into designing and making jewelry. Comparatively, bullion comes with only a marginal fee for the processing and the work gone into giving the yellow metal the coin or bar structure.

But a jewelry and bullion comparison is akin to comparing oranges with apples. Even though gold jewellery and gold coins are made of the same material, they serve different purposes. In other words, it would be myopic to view precious metals jewelry only from the investment angle.

If you would like to invest in gold for long-term gains and jewelry is therefore not on your radar, you might as well dabble in stocks. Though the risk element is higher with investing in stocks, mutual funds, gold futures, etc., the returns over a period are more significant than investing in gold. 

Gold Jewelry: The Different Types

Gold jewelry is not just natural gold mixed with few metals and turned into jewelry. The proportion in which the gold gets mixed with other metals, the actual mixing of the metals, etc., are things you must know before buying gold jewellery.

In other words, there are different types of gold jewellery. The following are some of the standard classifications:


Gold-plated jewelry is jewelry coated with a thin layer of gold through electroplating. The base or core material is usually a relatively inexpensive metal, such as aluminum and copper.

Compared to solid gold jewelry, gold-plated ornaments are relatively low-priced. The actual price point is ascertained by the plating’s thickness, measured in microns. A micron is 0.001 of a millimeter.

There are different kinds of gold-plated jewelry, such as bridge jewelry and costume jewelry. Costume jewelry is usually plated with gold that’s a micron or less thick. It’s inexpensive, but the plating won’t last too long. You get what you pay for!

Branded or higher-end gold-plated jewelry comes with two to three microns of plating, which helps with both the longevity of the piece and its overall look.

Gold Vermeil

Vermeil, also called silver-gilt, is a kind of gold-plated jewelry but with some quirks. The base metal is sterling silver. It cannot be any other material. Also, the plating is at least 2.5 microns thick.

Gold vermeil is usually opted for if the artisan wants gold jewelry that’s relatively durable and also not expensive. Gold vermeil is a relatively popular form of gold jewelry.

Kindly note, vermeil is durable but not immune to wear or scratches. The coating may not come off that easily. But if you don’t take proper care of the ornament or not treat it like you’d care for pure gold jewelry, the top layer could change color quicker than usual.  


Unlike the above types, gold-filled jewelry adopts a more “integrated” approach. A thick layer of gold is bonded to the base metal. As a result, gold-filled jewelry has more gold than gold-plated or vermeil.

Gold-filled jewelry must have 5% gold (at least), making the gold jewelry pieces much more durable than the gold-plated variants. If plated jewelry lasts two to three years, gold-filled pieces will stay good much longer. And if taken good care of, some could even last decades.

Due to the higher amount of gold present in the jewelry, gold-filled is naturally more expensive than gold-plated jewels. Therefore, gold-filled material is commonly used to make vintage and antique jewelry — the buyers are willing to pay slightly more than the price of plated gold.

Rolled Gold

Rolled gold, or gold overlay, is essentially a couple of gold sheets going on top and below brass or copper. At times, the sandwiched metal is silver. The gold sheets and the metal are fused by heating and rolled out to make the raw material.

Often confused with gold-filled, rolled gold is a material commonly used in the watchmaking industry. It’s also reasonably common in costume jewelry. Rolled gold is of higher quality and lasts much longer than gold plating. In other words, it has multiple times more pure gold than gold-plated jewelry.

Like with gold-filled jewelry, rolled gold must have at least 5% of the precious metal. High-quality gold overlay pieces bear a stamp indicating the amount of gold used and the purity levels. The abbreviations RG (rolled gold) and RGP (rolled gold plate) are usually inscribed onto the pieces for identification.

Solid Gold

Though the last type on this list, jewelry made from solid gold is standard — it is the kind that comes to most people’s minds when they think about gold jewelry or aspire to buy them. Only when the budget limits, people look to the types mentioned above.

Unlike the above variants, gold is used as the base metal in solid gold. As a result, solid gold jewelry will never show discoloration or lose its sheen because there’s gold at its very foundation.

Contrary to general assumptions, the term “solid gold” doesn’t mean “pure gold”. The amount of gold in a given piece is never a constant. The gold content usually varies across individual pieces and jewelers. Quite obviously, the price of gold signifies that or is based on how much gold there is in the article.  

Pure Gold

Pure gold, as the name indicates, is plain gold. It’s not layered or mixed with any other metal or chemical element. 24K (24 karats) is the terminology used to denote pure gold. 22K, 18K, 14K, etc., are solid gold. (Karats have been discussed in more detail later in the article)

The Advantages of Owning/Investing in Gold Jewelry

The following are some gold jewelry positives that unimaginative buyers generally do not pay attention to:

Note: Since the discussion is about gold, some of the benefits discussed below can also be applied to gold coins and bars.

You Get to Wear It

As touched upon multiple times earlier, gold jewelry is not necessarily “value for money” or doesn’t pack in as much gold as bullion does for the price. But, on the positive side, you cannot wear a gold coin or bar like you can sport jewelry.

And, as corny as it may sound, you cannot put a price tag on the happiness or sense of pleasure derived from wearing gold jewelry.

Even if you manage to carve a hole into your gold coins or bars and run a chain through them, the outcome will not be as aesthetically pleasing as a professionally designed and handily put-together jewelry piece.

Gold is Resilient

On the periodic table, gold is the least reactive metal. That means the metal doesn’t react with oxygen or is unaffected by water, air, alkalis, and pretty much all acids (except for aqua regia).

All of that means gold doesn’t rust or corrode. Even if it does, the progression would be so astonishingly slow any signs of deterioration would be almost impossible to discern.

Can Be Passed Down

Jewelry can be passed down to the next generation. Bullion bars and coins could also be set on that journey, but they may not hold as much sentimental value as the gold chain or ring your grandparent, parent, sibling, etc., passed on to you.

That is particularly true with jewelry made of 24K gold, as actual gold acquires fine scratches and a finish reminding of the original wearer. Scuffed up 24K jewelry has a story that may not have universal appeal, but it’s something you would certainly be able to appreciate and cherish on a personal level.

Diversifies Your Gold Holdings

Generally, your investment in gold should not be more than 10% of your entire portfolio. That’s because gold doesn’t appreciate over the long term as much as stocks, bonds, and other high-risk assets do. Investing more in gold than recommended could stunt your portfolio’s growth.

And of the 10 or 15 percent of your investments held in gold, it’s advisable to diversify them further. Having an eclectic mix of actual gold holdings – bars, coins, jewelry, gold ETFs, etc. – can make things interesting.

Gold Jewelry and Karats

Commercial gold (sold as jewelry or bullion) is rarely 100% or complete gold. The amount of the valuable metal is usually lower and denoted as “karats” (a fancy name for “parts”). The karat range is 0 to 24 – with 0 meaning no gold and 24K signifying 100% gold.

For example, if a piece of gold jewelry is 22K gold, it means the gold piece consists of 22 parts gold and two parts some other precious metal(s) — such as copper and silver.

The smaller the karat number, the lesser the amount of gold will be in the piece. Jewelry with fewer karats also means a lower price tag. In other words, a 10-gram, 18K solid gold chain will be cheaper than a 22K gold chain of the same weight.

Even the gold used in the various types of gold jewelry mentioned above is not usually pure or 24K gold. They are typically 14 or 18K. At times, it could be 12K.

How Many Karats is Bare-Minimum?

Any piece of commercialized gold must meet a certain threshold for it to be called “gold”. 10K is considered the minimum karat number. A piece of gold jewelry with nine karats or even less could go down as gold in certain regions. The same article, however, may not be deemed gold in other parts of the world, such as the United States. Refer to this World Gold Council page to learn more.

The Added Metals Change the Jewelry’s Color

Metals such as copper and silver do not just make gold jewelry stronger but could even change the metal’s hue a tad. In other words, rose gold and white gold are essentially the results of adding copper and silver to gold. The higher the quantity of copper and silver in the mix, the more red or white the final piece of jewelry would be.

Generally, 14K gold does not look as yellow as 24K gold — whether it’s rose gold or white gold. 18K gold jewelry comes closer to achieving the real gold look. That’s a primary reason why 18K gold is more sought after among people who want their jewelry to be strong and look the part.

Kindly note the metal alloy’s exact color would depend on the metals that go in and the plating. For instance, it’s normal for an 18K white gold finished with rhodium to look more like platinum and less yellowish than an unplated 14K white gold.

If you’d like to learn more about the composition of gold and its colors, read our gold purity guide.

How Many Karats in a Piece of Gold Jewellery is Ideal?

Generally, gold jewelry is 14K or 18K. 22K is also quite common. 24K is not rare but not common either.

If you had to pick between 14K and 18K, go with 18K jewelry. It strikes the right balance between the proportion of gold (75%) in a given piece and structural integrity. 18K gold is pure enough for people who don’t want their gold ornaments to be heavily diluted and still not malleable.

Notably, 18K gold jewelry suits both the budget-restricted and people with higher affordability. If you cannot buy 18K, 14K gold jewelry should be your second-best option. If 14K is out of reach, save up and defer the purchase to a later date.

For those seeking a proper balance between strength and gold content, 14K gold is the go-to. Compared to 18K gold jewellery, which is a lot more gold than 14K, a piece of 14-karat gold jewelry is more durable, or the metal alloy doesn’t scratch or wear out easily.

What is 24K Gold Jewellery? Does It Even Exist?

24K gold jewels are lovely ornaments made from pure, yellow gold. As stated earlier, 24K gold is soft. But it’s not “weak”. It’s certainly not soft clay or Play-Doh.

Gold is a “metal”. Though not all metals are rigid or strong like steel and iron, gold is far from the softest. There are much softer metals than gold, such as sodium metal. Cesium – which is a silver-white, shiny, and rare metal – is the most delicate metal. 

To answer the question, jewelry made with 24K gold does exist. The type may not be standard in the West, but it’s pretty popular in the East, particularly in India and China.


Because 24K gold is softer than gold alloys, they aren’t the most durable. Therefore, jewels made using 24K gold are usually thicker than their alloy counterparts. If you prefer thinner jewelry, buy 24K gold as pendants, bracelets, and necklaces.

Rings take a lot of abuse and are not ideal 24K gold articles. That said, pure gold rings do exist for people who do not mind the band losing its original shape or getting deformed with use.

From the goldworker’s perspective, 24K gold is easy to turn into gold articles. Making intricate and delicate jewelry out of pure yellow gold is more straightforward than shaping gold alloys into jewelry with nuanced design attributes. 


24K gold is strikingly yellow or typical gold. For most buyers, that color is the draw. But for some, the bright yellow could be a bit too yellow or garish. If you fancy gold that’s a bit toned-down in its shade, look to jewelry made using 14K or 18K gold.

18K gold, for instance, is 75% gold and represents the more traditional assortment of gold and other metals. It’s commonly used to make fine jewelry. The color is a milder yellow, which a lot of people fancy over the color of typical gold.


24K gold is pricier than jewelry made with gold alloys because the former is complete gold. Also, making jewelry out of 100% gold is trickier or more labor-intensive than creating ornaments using metal alloys. Therefore, the price of 24K gold jewelry constitutes the cost of the precious metal and the artisan value. 


Whether you find 24K gold splendid or not, the jewelry certainly holds more value than its counterparts (22K, 18K, etc.) when viewed from a purely financial angle.

In other words, jewels made from 24K gold can be ideal investment pieces. The resale value may not be on par with bullion coins and bars but it certainly would be nowhere as bad as non-24K gold jewels.

Buying Gold Jewelry – Things to Consider/Tips

Not every piece of gold jewelry available for purchase is the same. The design distinctiveness is quite apparent. What’s not so simple to discern is the amount of pure yellow gold in a given piece.

Knowing gold alloys, karats, etc., is a great start, but you can never be fully equipped with information or know it all when you buy gold. Variables or elements external to you will also have to play a part in helping you procure the ideal piece of gold jewelry.

Here are a few things to be particular about or adhere to:

Choose the Right Vendor

The jeweler or retail shop arguably plays the most critical role in your jewelry purchase process. Jewelers are not there just to serve and meet the needs of their patrons. They are in it for their benefit as well.

As a woke customer, you must ascertain the jeweler is benefiting from the transaction out of good faith and not taking you for a ride. In other words, do not fall prey to the misleading sales tactics of some disingenuous jewelry stores.

The good news is most jewelers are reliable and honest. The jewelry business is a long-term endeavor, and jewelers would not want to risk their image or hurt their credibility to score some fleeting gains.

To be sure about the legitimacy of your purchase or the exact value of the jewelry, buy gold from reputed jewelers.

Associate with trustworthy, independent jewelers. Ask people around and look for reviews online for recommendations and/or to sieve the list you may already have. An indication of reliability is transparency. In other words, you should be able to learn beforehand the store’s fees, making charges, transaction costs, etc.

Shop Online with Caution

If you cannot find a trustworthy jeweler near or around you, consider buying gold jewelry online. Compared to buying gold at a brick-and-mortar store, buying jewelry or pretty much anything for that matter on the Internet is a lot simpler and convenient. You could peruse the various designs without stepping outside your house.

But that convenience comes at a cost.

Dupes are Everywhere Online

The likelihood of landing up with fake gold or gold jewelry not as pure as claimed is high. If you’re checking out the e-commerce site of a traditional jeweler, product quality concerns will be non-existent. And if you encounter issues with your purchase or product, the jeweler will be more than happy to address your concerns. Their reputation is at stake, after all.

Learn About the Seller

When dealing with jewelers that sell gold jewels and similar high-priced items purely online, you are advised to exercise caution. Learn more about the business, read reviews, etc., to get more familiar with the brand. If the online jeweler is a reputed brand or a name that you recognize, allow them to serve you.  

But if the seller is relatively new to the industry, doesn’t have the cachet to show, etc., tread with caution. And if the business’ online reviews are skewed or overwhelmingly/suspiciously positive for a relatively new company, it’s recommended to steer clear.

Buy from Official Sites

Buy jewelry directly from official websites and not through some third party. Marketplaces such as eBay and Craigslist are not ideal places to buy gold online. Such sites should not be considered when looking to buy gold coins, buy jewelry, luxury watches, or any other expensive good that can be easily duplicated.

Do Not Let the Jeweller Educate You

Don’t go with what the jeweler says — even if they are the most reputed, trustworthy folks in town or the industry. Seeking information about the quality of a piece of jewelry from an entity selling it to you is moot since there’s an apparent conflict of interest.

And it’s more than just about hiding information or concealing the truth.

Quite often, the information dished out is half-baked knowledge, or the jeweler may not know much about their products themselves. Most jewelers or people working at jewelry stores do not have a degree in physical sciences to have in-depth knowledge about jewelry composition.

The same philosophy applies to price as well. You don’t want a jeweler to update you on current gold prices or the spot price since they would throw a number that’s not the exact value or justifies their price of gold. Though it’s an open secret that jewelers levy additional charges on their items for artisanship, labor, overheads, etc., they do not like to admit that to their customers openly.

Don’t Cheap Out on the Karats

Buyers with limited buying capacity would look to buy gold jewelry with fewer karats. But a gold jewelry's retail price is more than just the gold it constitutes. The artisanry involved, for instance, has to be paid for as well.

As a buyer looking to spend as little as possible on their jewelry purchase, you could buy gold jewellery with even fewer karats. But make sure you don’t drop too low. The lower the number of karats in the jewelry, the more it would cease to look gold. And if it’s less than 10 karats, the jewelry will no longer be considered "gold" — at least not in the U.S.

Also, 12K, 10K, or jewelry with even lesser gold content may cause skin allergies in some allergic to nickel. Some people may develop allergic reactions to even pure gold. If you are one of them, steer clear of jewelry and buy bullion instead.

Is “Investment-Grade” Jewelry a Thing?

There is no such thing as “investment-grade” or investment jewelry — it's certainly not official terminology.

Some pieces of gold jewelry command a higher price in the resale market than their original price for aspects not pertaining to the precious metal itself. The factors could be:

  • the historical significance of the piece 
  • the rarity of the design 
  • the colors or types of stones embedded in the jewel, etc. 

Native American jewelry, for instance, is a lot more valuable than its melt value and could be referred to as “investment-grade”.  

Investment-grade jewelry can be likened to certain gold coins valued for their rarity or collectability than just the amount of gold in them. For example, the American Gold Eagle is a bit more valuable than comparable coins. It’s priced higher because it’s rarer, has a valued history, etc. than other gold coins.

There’s no “investment-grade” jewelry because of the lack of set criteria or standards to meet. There is also no regulatory body governing things and giving their seal of approval to or certifying rare gold jewellery. The jewelry is not traded on some index for transparency and clarity.

All of this means if you don’t know much about a given piece of “investment-grade” jewelry, there’s no way you’ll be able to identify and appreciate the rarity of the work just by looking at it.

The Luxury Watch Analogy

Investment-grade jewelry can be likened to those high-end luxury watches that aren’t necessarily studded with diamonds and other precious stones but sell for a higher price than ornate timepieces due to their limited nature and tremendous horological value.

For the general buyer who has no clue about how the luxury watch market works, a stainless-steel watch selling for several hundred thousand dollars more than a watch decked with precious stones and/or made from high-end materials would be hard to comprehend or feel outright outrageous.

Read More: Is Gold A Good Investment


To conclude, gold jewelry doesn’t offer the best bang for the buck. The resale value is mediocre, even if it’s a piece of expensive gold. But it’s not the villain most people who invest in the gold market portray it to be.

If non-monetary gains such as sentimental value, wearer pleasure, etc., have to be considered, gold jewellery beats bullion by a fair margin. In other words, owning gold as jewelry or investing in gold pieces that aren’t bullion coins or bars has its psychological and financial benefits.

If you don’t care much about sentiments and are also not fans of wearing gold, gold bullion makes more sense. And if you are going to buy gold coins and gold bars, you might as well set up a gold IRA. A gold IRA is arguably the most secure, foolproof method to hold money in gold. It’s a solid addition to any investment/retirement portfolio.

Click here to learn about gold IRAs, gold IRA companies, and everything else you need to open a gold IRA. 

The Most Valuable Gold Coins FAQs

How to ascertain the quality of the gold jewellery?

If you adhere to the above guidelines when you invest in gold or buy the metal – for instance, choosing the right jeweler – you shouldn’t encounter jewelry quality concerns. But to be sure and not take the jeweler’s word or go blindly with their reputation, look for some quality mark on the piece signifying the metal’s karat numbers, authenticity stamp, etc.

What should you choose between gold vermeil/gold-filled or pure/solid gold jewellery?

If you are buying gold jewelry for everyday use and don’t want to spend a lot of money, gold vermeil or gold-filled are your best bets. If you are considering plated jewellery, you must know that it’s the least durable and can be hypoallergenic too — issues which both vermeil and gold-filled do not present.

Solid gold or pure gold jewellery is the real deal and should be your family heirloom pieces. Not to mention, they are a lot more durable than gold-filled and vermeil.

How to identify fake gold jewellery?

As mentioned above, gold is a resilient metal. That means it won’t tarnish. Therefore, check for discolorations in your piece at the time of purchase. Another clear indication of fake gold is shade variations. Even the slightest of inconsistencies is a red flag. 

If everything looks good, do the scratch test, provided the jeweler is okay with that. If that’s not an option, do the magnet test.

Gold is non-magnetic, and if it sticks to the magnet, the jewelry is fake. Kindly note, aluminum and copper do not attract magnets too. Therefore, let the magnet test not be the be-all and end-all of your testing.