How to Buy Gold – Expert Advice for Investing in Gold

The Alloy Market currently focuses solely on buying gold from our clients. However, there is a flip side to that coin that we must explore: buying gold from the client’s perspective. We consulted with industry experts for this article on how to buy gold, particularly as an investment.

Purchasing Gold: The Differences in Buying Gold Jewelry vs. Gold Coins and Bars

Inside, we compare and contrast the differences between buying gold jewelry vs. gold coins and gold bars (bullion). Learn what factors contribute to a customer’s gold purchase, and how to buy gold while considering those factors and their effect on future resale options. 

Emotional Connection Drives Jewelry Sales

Gold jewelry can be a valuable investment when taking certain factors into account. However, people purchase jewelry for emotional reasons, and emotions do not translate to monetary value. Conversely, when dealing in gold coins or bars, you will be looking at hard numbers for purchase and sale. 

Brandon Thor of Thor Metals Group discusses this distinction in the gold buying process. “When it comes to buying gold jewelry, the most significant difference is how people connect emotionally with what they’re buying. The story matters as much as the metal itself.”

On the other hand, when someone buys gold coins or bars, emotion rarely plays a role. “It’s all about confidence in purity, weight, and liquidity. Buyers view it as an investment, a hedge, or a store of value that they can easily liquidate when needed. The strategy is direct and data-driven,” he says. 

When purchasing gold as an investment, it’s vital to consider its potential future sale value. The emotions fueling a gold jewelry purchase may not yield the same financial returns as coins or bars. “Both products carry the intrinsic value of gold, but jewelry carries a personal value that coins and bars rarely hold,” Thor states.

Investment-Grade Gold Preferred Over Jewelry

Some gold buyers and sellers won’t even deal in jewelry. Instead, they prefer the simplicity of dealing in investment-grade gold. The numbers are straightforward, and the gold is of a higher purity. 

“We don’t sell gold jewelry as it’s of a lesser karat,” says Nicholas Ward of Gold Bullion Partners. “Most jewelry is 9, 14, or 18 karat gold. When fashioned into rings, necklaces, etc., it attracts markups of 100-300%, which makes it unsuitable as a store of value.”

In the West, as he mentioned, gold jewelry is typically made of a lower karat. Lower karat means the percentage of gold in the jewelry is less than 100%. When investing in gold, higher purity brings a higher price.

In Asia, however, it is not uncommon for jewelry to contain 22K and even 24K gold. “Twenty-four karat gold is considered a form of international currency, because it is accepted around the world,” said Kent Wong, managing director of Chow Tai Fook Jewelry in Hong Kong.

In China, it is traditional for a bride to wear 24k gold bangles featuring dragons on her wedding day. These bangles serve as a form of insurance. If the marriage does not work out and the bride needs money, she can easily liquidate the jewelry.

When purchasing jewelry for investment, we suggest 22K or 24K gold for the highest return. Pure gold is the most sought-after and offers the highest liquidity. Do keep in mind that pure gold is much softer than lower karat gold. Wearing items made of 24K gold may cause scratches or dents.

Craftsmanship vs. Numbers in Gold Sales

As we mentioned earlier, you pay extra costs when buying gold jewelry that you can’t recover when you resell it. Jaume Labro of Jaume Labro Godo Kaisha explains the considerations he covers with his clients purchasing jewelry:

“When showcasing a 22k gold necklace with intricate filigree work, I discuss the craftsmanship, the cultural significance of the design, and how it can be both a statement piece and a cherished family heirloom. I explain how the karat of gold used (such as 18k vs. 22k) affects durability and color, which helps buyers make informed choices based on both beauty and practicality.”

Craftsmanship is a purchase consideration that does not always translate to profit. When durability is a concern, it usually means jewelry requires a lower karat. Due to these two factors, jewelry is generally not an ideal investment.

Like most things, this comes with a caveat. For lower karat pieces made by a well-known designer, this may result in high demand. It is possible to break even or even come away with a profit at the time of sale.

Most of the time, the wiser gold investment option is going to be coins or bars. Their value is consistent across the board. “On the other hand, when I sell gold coins or bars, the conversation becomes very numbers-driven,” Labro says. “Buyers are more interested in the current spot price of gold, the buy-back policies, and the authenticity of the product.”

Your motivation determines the gold pieces in which you invest. “The key strategic difference is that with jewelry, I’m selling an experience and emotion; with coins and bars, I’m providing a trusted asset with measurable financial value,” Labro concludes.

Selling Gold

Whether you are new to investing in gold or a seasoned professional, there comes a time to sell. When cashing in on your investment, ensuring the highest return at the time of sale is crucial.

The Alloy Market is your go-to source for selling your gold. Request your free, no-obligation appraisal kit today! We offer free, insured shipping up to $100,000, providing you peace of mind. Once you accept your offer, we initiate payment the same day. Get the most return on your investment today.