The creation and collection of jewellery have been dated to one of the earliest human tools that were created. Jewels were crafted from common materials – plants, stones, bones, shells, or animal skin. As time passed by, people started to turn jewellery into a work of art by taming precious gems and rare metals.

The things that make jewellery special are the art, effort, and time put behind creating it. It was an ideal gift to showcase political, religious, or societal ranking. As technologies advance, jewellery becomes more complex. We now have access to other metals and stones.

Previously undiscovered materials are now available, making jewellery even more valuable with its variety.

If pieces of jewellery can be this valuable, can they also be good investments?

The role of rare and precious metals and gems in the economy

Luxury consumer products like gadgets and cars drop in value as soon as you leave the shop. Gemstones, precious metals, silver, and gold keep their value.

Every country has a gold reserve. National central banks are required to have gold reserves because the mined gold will be used as a guarantee to pay depositors, prepare for a potential crisis, secure currency, and store value. Currently, World Gold Holdings have seen a 49.2% allocation of mined gold to jewellery.

Other precious metals and gems play the same role in the economy. They act as commodities that can be bought and sold for economic balance.

Given these, jewellery can act as a currency or stock. Its value goes up or down, depending on the performance of the world market. This is why some people invest in jewellery, especially gold.

Why you should consider investing in gold

Gold is now considered an asset. Perhaps, the biggest drive for people to go to gold its price performance and reaction to uncertainty and the decreasing barriers in purchasing them.

Protection against inflation

Despite the passing of time, gold remained its value well, which makes it a good protection against inflation.  If you can buy land with gold a hundred years ago, you can still buy land with gold today.

Protection against crisis

Gold can be a currency if a country’s currency is in crisis. If for example, the Singaporean Dollar devalues to ease financial suffering, a gold investor can trade her gold to US Dollars for money despite the uncomfortable SGD lowdown. Owning gold provides security.

Remember: Gold will always have value in any economic environment.

A way to preserve and create wealth

The performance of gold for the last decade has shown how it can defeat some stocks and how it can perform well despite economic turmoil.

Gold 101: How to Invest in the Gold Market & Options

What You Need to Know About Investing in Gold Jewellery

Tips in investing in jewellery

Take time to learn more about what you’re getting yourself into to maximise the potential growth of your investment. Here are some tips on investing in jewellery.

  1. When buying jewellery –gold, pearls, gemstones, or diamonds — ask for a certificate of any internationally-recognized institute or laboratory. This will help you authenticate your purchase and keep its value.
  2. Workmanship is very important. Look at the quality and how it looks like. Jewellery that seems more complicated to create in one glance has more potential to increase in value.
  3. If the jewellery is not new, find out the story behind it. Who made it? What did it go through? Who were the ones who used to own them? Jewellery previously owned by important people – politicians, celebrities, influencers – can appreciate in price.Take The Titanic’s Heart of the Ocean Pendant as an example. After Titanic’s success, a real-life version of the Heart of the Ocean pendant was created and was sold to an unknown buyer for $2.2 million.
  4. Find out who made it and if the person is prominent in the industry. Vintage pieces also have the ability to catch good prices.
  5. Investing in jewellery is like futures trading. If you find a contemporary artist whom you think will make it big in the future, you can start investing in his/her work early. Beware, however, if your anticipation is wrong and you might lose money.
  6. You don’t have to look for good jewellery investments in big stores. Some investors strike a lucky chord and find good investments in antique shops and pawn shops. Unfortunately for the shop owner who didn’t do his homework and researched, the maximum profit will go to the buyer who did.

Beyond the glitz and the glamour, jewellery are often attached to very important milestones in life. Some receive gold jewellery as heirlooms from their moms and grandmothers. Some get jewellery when they graduate. Some women get diamonds when they get engaged. Some buy jewellery to celebrate their 50th wedding anniversary.

Beyond what you can potentially earn from your collection, remember that nothing can replace the memories bound by these masterpieces.

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C.E.O @ The New Savvy
Anna Haotanto is passionate about finance, education, women empowerment and children’s issues. Anna has been featured in CNBC, Forbes, The Straits Times, Business Insider, INC and The Peak Singapore.   She was nominated and selected for FORTUNE Most Powerful Women conference in 2016 (Asia) and 2015 (San Francisco, Next Gen).   Anna has 10 years of experience in the financial sector and is currently a Director in Tera Capital. Her previous work experience includes positions at Citigroup, United Overseas Bank, a regional role in Business Monitor and a boutique private equity firm based in Shanghai. She graduated from Singapore Management University (Finance and Quantitative Finance).