Is Jewelry a Good Investment?

High gold price paving a wealthy path for ‘accidental investors’

As the high price of gold continues to turn heads, a new class of investments has started to emerge: Accidental investors are popping up in the last few months, aptly named since the fashion jewelry they bought just a few years ago is now making them money.
Precious metals specialists across Canada are seeing a rising surge of people looking to exchange their gold keepsakes for a hefty return.

Headlines and tracking the figure on sites such as Kitco, show the price per gold ounce has skyrocketed in the past four months, increasing from $3,675 CAD in mid-September to today’s rate of $5,875.

“Many folks are surprised, still, when we go through the valuation process of their gold items,” says Justin Yampolsky, manager of Muzeum in Toronto, a precious-metals outlet highly regarded for their fair prices in buying gold items. “Whether it’s something they inherited or bought decades ago, these ‘accidental investors’ are receiving a lot more money than they expected.”

The high price of gold has encouraged Muzeum customers to look for items they may have ignored for years, Yampolsky says. “They’re cleaning out their drawers and attics and stumbling across things they forgot about, and some are opening a box that has long been locked and finding that there’s gold in there.”

The escalating price can be attributed to a variety of factors, ranging from the U.S. government shutdown to the high tariffs. Even before the shutdown, the asset — and other metals, like silver — had seen impressive gains over the last year, chiefly caused by economic uncertainty ripping across the world. 

Also, the prospect of lower interest rates has also turned gold into a more attractive investment than interest-bearing investments.

The price of gold often jumpstarts when people are anxious about the economy and the general state of the world. The price also shot up at the start of the pandemic. Customers often  want the comfort of physically holding something of value in their hand (or storing it safely) in an unstable climate.

Questions often crop up around this time on how the value of gold items are evaluated. 

First, the weight of the item should be relatively easy to find out. A typica scale will tell you how much a piece of jewellery or heirloom weighs, and if you own a gold bar or bullion-grade coin, the weight should be stamped on the product. There can be some cloudiness with objects like jewellery or watches, as the piece could also include diamonds, gems, or add-ons not made from precious metals of greater or lesser value.

Once you have the weight of the product, the purity will then inform you how much of the piece is actually made out of gold. Again, investment-grade products will make this very clear with a stamp on the side, too. 

Looking at jewellery, if you know how many karats the piece is, you can calculate the purity from that starting point, as karats refer to parts per 24 with precious metals.

What is often easiest, though, is visiting a trust precious-metals specialist such as Yamplosky at Muzeum. Their guidance, strengthened by many years of studying and evaluating a wide range of gold items, gives gold sellers the confidence they need to get the best price for their items. 

These experts can assist so-called accidental investors secure the ideal return for their rings, necklaces and bracelets, as well as gold-plated items disregarded until now. They can also advise customers on other items that could be valuable, such as heirlooms or jewellery made from silver and platinum.  

The high price of gold isn’t going to slow down anytime soon, financial insiders predict. Almost 70% of global institutional investors expect gold prices to post additional gains next year, Goldman Sachs said in late November.

Daan Struyven, Goldman’s co-head of global commodities research, said that “most of the rally year to date, or in fact over the last few years, is by sticky purchases, especially of central banks. We think they will continue to diversify into gold.”

If there’s any time to sell your gold jewelry or other items, it’s now. For details about selling your gold products, give Muzeum a call for a free evaluation and to get all your questions answered!