FINE JEWELRY AS A PURCHASE

When you buy even the finest jewelry, you are buying a manufactured item, no matter how handcrafted it is. The reason with the metal, because precious metal used in jewelry is never pure. Gold, platinum, and silver are all alloyed for various reasons.

The greater the amount of the alloy, the less value the precious metal has as precious metal. For example, the price of gold on commodities market and the world gold market is based on 24 karat .9999 gold. Thus, the value of the gold in jewelry is worth only as much as the percentage of gold used. Twenty-two-karat give have more gold than 18-karat gold, and 18-karat gold will have gold than 14-karat gold, but none has the amount of gold as 24-karat-gold. The same considerations hold true for silver and platinum.

The first reason why jewelry is not an investment, therefore, is that you are buying karat gold, not "pure gold," and gold is not valuable simply because it is gold. Since the world market is based - "pure" gold, the gold in jewelry has less value, depending on the karatage. That value will increase-or decrease-with the price of gold, the but it increase-or decrease-with the price of gold, moreover, it must be melted down, perhaps separated from the alloy, before it can be used, with that cost being ducted from the price you get.

The manufactured metal is further manufactured in jewelry in design and workmanship, both of which add to the cost of the gold. If you buy a one-of-a-kind piece, regardless of whether you buy it m the person who made it or from a store, you are paying for design, workmanship, and exclusivity-all of which add to the price the gold and may cost more than the gold. If you buy massmanufactured jewelry, the cost of design and workmanship is spread out among all the pieces of jewelry of that design. You are also playing for increases in cost along the sales chain until the jewelry reaches you.