Buying Gold Jewellery | What You Should and Should Not Do
For centuries, gold has been a reliable hedge against inflation and the volatile ups and downs of the stock market. Since gold is in demand worldwide, it represents the genuine value of money.
Whether you're looking to buy fine jewellery as an investment or as a rainy-day fund, it might be challenging to know what to look for and where to make your purchase. Therefore, you should choose your gold jewellery wisely. The stakes are enormous. Therefore it's wise to educate yourself about buying gold before you do it.
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Here are a few simple things you should and should not do when shopping for gold jewellery. So without further ado, let's start!
What You Should Do While Buying Gold Jewellery
1. Check the Purity of the Gold
The purity of the gold determines its value. Therefore, before making a purchase, check the gold's content and purity to make sure it meets your needs. No matter where you buy your gold jewellery from, always verify the purity.
It would be best to always verify the gold's purity before purchasing gold jewellery. Carat and Fineness are two methods for determining the actual gold content of an item. As we all know, the highest quality gold available is 24 carats. However, 22-carat gold is a mixture of 22 parts of gold with two parts, Zinc or Silver.
Let's take a quick look up at different gold carats and their purity.
- 8-carat — 33.33%
- 10-carat — 41.7%
- 14-carat — 58.5%
- 18-carat — 75%
- 22-carat — 91.67%
- 24-carat — 99.99%
Jewellers often work with 14, 18, or 22-carat gold because 24-carat gold is too soft for use in jewellery. Thus, no one should ever spend their hard-earned money on gold jewellery without first verifying its authenticity and quality.
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Hallmarks
Hallmarking is a reliable indicator of the gold's authenticity, so it's always a good idea to buy hallmarked jewellery. Hence, looking for hallmarks is the quickest and most reliable approach to determining authenticity and purity.
Hallmarked jewellery will have a serial number and a carat stamp. Carat, the year the piece was hallmarked, and the jeweller's mark are all components of a hallmark. Moreover, jewellers use their hallmarks, such as the year of production and the metal's purity, to identify their products.
2. Compare Price
Gold's price fluctuates daily with the market. The price is determined by taking into account the bullion price and then deducting an amount according to the percentage of pure gold in the selling gold.
Most jewellery stores will prominently display the current bullion price, but it is still wise to double-check the price online before making a trip. Therefore, compare the current price of bullion with the discount for gold purity.
While larger jewellery stores often prominently show current bullion prices, smaller stores typically do not. That is why you should always look up the store's costs online before going there.
3. Negotiate the Manufacturing Price
All jewellers incorporate labour expenses into their prices for customers to cover. Fabrication costs are often quoted as a percentage of the prevailing price of gold. Due to this, the amount you pay as a manufacturing charge can fluctuate according to the cost of gold.
Machine-made or minimally designed jewellery typically has a reduced making fee, which is somewhere between 6% and 14% of the cost of gold. For those looking to buy a large quantity of jewellery, certain stores may offer flat production rates.
However, production cost rises to 25% of the price of gold when working with a more complex design for a jewellery item. Due to the disorganisation of these fees, you are free to negotiate your rate at any time. Thus, you should constantly try to haggle down the jeweller's manufacturing costs.
4. Buy from a Reliable Source
When looking for exquisite jewellery, it's best to go with a business or online store that specialises in that particular field. Don't go to an all-inclusive company hoping to find exceptional jewellery. In other words, a gold jewellery expert can help you more personally and provide you with a broader selection.
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Therefore, be specific in your online searches and read up on the firm before purchasing from them. In addition, see whether there are any customer reviews of their service.
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Must Check their Return Policy
Find out the specifics of the company's return policy for gold jewellery before making a purchase. Some may even come with guarantees from the original manufacturer.
What You Should Not Do While Buying Gold Jewellery
1. Avoid Studded Gold Jewellery
There is a significant markup on all gold jewellery that features precious or semiprecious stones. The issue is that verifying the authenticity of the precious stones used in the jewellery is pretty challenging. Moreover, stone-studded jewellery decreases the selling price, so your gold jewellery won't benefit you in your hard times.
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When purchasing jewellery with embedded stones, verify the correct net gold weight. When selling or exchanging studded jewellery, the stones are removed to calculate the total weight of gold utilised. Thus the seller must forego charging charges. Therefore, if you paid a high price when you bought, your loss could be even more significant when you sell. In a nutshell, there is no profit from selling gold jewellery with invaluable stones.
2. Buyback Policy
Most jewellers boast an excellent repurchase policy and pay out the total value of your gold when you sell it to them. Therefore, determine the item's potential profit upon resale before making a purchase.
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FAQ's
1. What types of gold jewellery should I buy?
Gold coins are the preferred form of investment gold. Coinage best represents the enduring appeal of the precious metal as a stable medium for the accumulation and preservation of wealth. Gold coins are also advantageous when selling gold during economic downturns.
2. How do I determine the value of gold jewellery?
Gold's worth is established both by its carat and its weight. One carat equals 0.916 grammes; hence, 24-carat gold is 99.9% pure, while 22-carat gold is just 91.6% pure.
3. What should I look for when buying gold jewellery?
When buying gold, you must look for the hallmarks embedded at the least prominent place in your gold piece. Hallmarks contain the purity, carat, manufacturing and all the necessary details that will help you value your gold.