"For those wanting to sell their jewellery in exchange for cash further down the line, a gold piece a smart investment."
Everyone likes to plan for the future. Whether this is how you tend to spend your weekend or how you’re going to make some extra investment decisions that will benefit you in the years to come, planning ahead is something we all have in common.
Speaking of investments, have you ever considered a jewellery piece as your next asset? Since now the average cost people in the UK pay for the likes of engagement rings stands at £1,483, it's fair to say that jewellery pieces are no cheap buy. However, for jewellery that is made from luxurious metals such as gold, silver, palladium, and platinum, the value is expected to only increase year upon year.
With this in mind, we discuss how a new jewellery investment is the next best asset for you to buy for the future, and what metal holds the greatest monetary value.
So, why invest in a jewellery piece?
There are several reasons why investing in jewellery pieces are favoured by many people. One being that expensive jewellery crafted with any of the metals mentioned above will withstand the test of time. Providing that you store it correctly, avoid any potential damage that could be done as a result of abrasive surfaces, and gently polish your jewellery, your pieces can last a lifetime. This means that if you do look to sell it further down the line, the value of such a piece won’t be affected by human error.
Another reason to invest in jewellery that contains the likes of diamonds is that, whether they are presented in a loose form or as part of a piece of jewellery, they can be removed from their current form and used for other pieces. From a sales perspective, purchasing jewellery pieces that include diamonds will help expand the potential market of people you will have waiting to buy your piece in the long haul due to the versatility of diamonds.
Jewellery investments: What qualities to consider
Perhaps the two most important factors to consider before purchasing any jewellery piece is the size and quality of metal it takes. Although the initial cost of these pieces won’t be cheap, it will make great returns in the future much more likely.
For gold jewellery pieces, since gold can be melted and reformed into something new, the value of such remains persistently high due to its adaptability. Therefore, for those wanting to sell their jewellery in exchange for cash further down the line, a gold piece a smart investment.
Other than the size and quality, the colour of the piece also determines its value. For example, rarer tones such as pink and red diamond stones are considered to be more valuable than other colours due to their rarity, leading them to be in high demand, but limited supply.
Metal: What’s changed?
Naturally, the value of the four main types of metals, gold, silver, platinum, and palladium, have differed in value over time for numerous different reasons. So, before investing in a new jewellery asset for the future, it's important to note down the value variances in the metals used to craft everything from necklaces to diamond rings, and the prices you can expect to pay.
For centuries, gold has been considered a highly valuable metal that has been mined, crafted, and traded all over the world. Since the 1970s, we have seen gold fluctuate between an appreciation and depreciation in value, but with the overall trend line shown to have increased.
Dating back to 1970, the price of gold was valued between £14-£16 per ounce (£218.20–£249.37 in today’s money). It steeply increased to between £169-£189 per ounce by the year 2000. Despite the 2008 recession the UK experienced, this didn’t depreciate the value of gold; it only slowed the increase of it. By 2011, the value of gold experienced a spike in value per ounce, peaking at £1,113, although it gradually depreciated in value to just over £700 in 2015. Since then, the value of gold has shown to be worth more than what it has been in over 50 years—in August 2020, an ounce was valued at £1,574.
To summarise, in 50 years, gold has shown to increase by a total of £1,355.80 (accounting for inflation).
Silver is another precious metal that has been considered a highly valuable asset used for jewellery and tableware over the centuries. Similar to gold, we have seen silver fluctuate between an appreciation and depreciation in value since 1970s, but with the overall trend line shown to have increased once again.
By 1970, silver was valued between £0.60 and £0.80 per ounce (less than £15.59 in today’s money), only to gradually increase to £3.12-£3.43 per ounce by the year 2000. Although the 2008 recession shown to have depreciated the value of silver from its highest value of £9.77 to £6.08, by 2011, silver experienced a spike in value per ounce, peaking at £29.26. This was followed by a steady depreciation down to £9.52 in the year 2015. Since then, the value of silver has shown steadily increase from this slump, and by August 2020, one ounce was priced at £20.53.
Considered to be the most expensive type of metal that is currently on the market, palladium is ideal for those wanting to make a rather expensive investment, but with even greater returns further down the line. For those wondering why palladium is valued at such a high price, it is predominately due to its rarity and shortage of supply. Since palladium helps turn toxic pollutants produced by vehicles into less harmful CO2 emissions and water vapour, demand has soared over the last decade especially as governments across the globe set targets to tackle climate change.
Similar to the other metals we have discussed, we have seen palladium fluctuate between an appreciation and depreciation in value since 1990, however at a less frequent amount, and with the overall trend line shown to have increased once again. In 1990, palladium was valued between £46 and £78 per ounce, only to gradually increase to £456–£623 per ounce by the year 2000. Although the 2008 recession shown to have depreciated the value of palladium to its lowest value of £101, by 2011, palladium experienced a spike in value per ounce, peaking at £529, followed by a steady depreciation down to £354 in the year 2016. Since then, the value of palladium has shown to steadily increase from this decline, and by February 2020, one ounce was priced at £2165.
To conclude, the value of palladium has shown to gradually increase by an overall value of £2,119 in 30 years, this being one of the most expensive metals to invest in.
Finally, platinum is another highly-valued metal that is considered to be one of the most expensive assets you can own as far as metal goes. Used for jewellery, décor, and dental work, platinum can take numerous different forms. Similar to all other metal mentioned above, we have seen platinum appreciate and depreciate in value over the years, but with the overall trend line showing to gradually incline. Dating back to 1990, platinum was valued between £200 and £292 per ounce, only to steeply increase to its highest of £426 per ounce by the year 2000. Again, the 2008 recession did depreciate the value of platinum from £1,112 to £521, however, this metal did experience a spike in value before the second half of the year.
By 2011, platinum recovered from this value loss and peaked at £1,146 per ounce. By now, we can see a pattern forming, whereby this increase in value is followed by a steady depreciation. For platinum, this dropped down to £562 in the year 2015. Since then, the value of platinum has shown steadily increase from this slump, and by August 2020, one ounce was valued at £718. Although platinum isn’t quite at the value it was in the first half of 2008, the value over time has shown to increase by £518 in 30 years, suggesting platinum jewellery is a promising asset worth investing in.
Other than the monetary value that jewellery pieces hold, from a buyer perspective, being the owner of a luxurious, high-end jewellery piece is something that can be passed down the generations to come. Therefore, other than jewellery being deemed as a solid investment piece if you ever needed to sell it, they can also hold great sentimental value too.