The Truth About Gold Jewelry

When it comes to gold jewelry, the truth is: not all gold is created equal.

Today, we’ll uncover the secrets of investment-grade gold jewelry that department stores won’t tell you about. These little tips could change how you think about buying gold jewelry forever.

But first, let’s dive into the latest news and check in with an update on inflation…

Danish Heirs to Sell $72 Million Rare Coin Collection

The legacy of Danish butter magnate Lars Emil Bruun has reached a stunning climax, as his descendants prepare to auction off a massive, 20,000-piece coin collection valued at an astounding $72 million. Bound by a century-old will, the collection was kept intact despite attempts by at least one grandchild to contest the terms. This fall, the collection’s first segment will be presented for sale, promising to be a focal point for coin collectors and historians alike.

S&P Global Reports Decline in U.S. Business Activity

On Tuesday, S&P Global noted a decrease in the U.S. Composite PMI Output Index, which tracks the manufacturing and service sectors. The index dropped to 50.9 in April from 52.1 in March, indicating a slowdown in private sector expansion.

The Fed’s May Interest Rate Decision: What to Watch For

The Fed will next meet to set interest rates on April 30 to May 1, the third of the Fed’s eight scheduled meetings in 2024. The upcoming inflation data will likely be a key factor in any decision to cut rates, as FOMC officials have specified their inflation targets before adjusting interest rates.

Over 1,800 Banks Accessed Emergency Funds Post-SVB Collapse

The Federal Reserve reported that 1,804 depository institutions, representing 20% of all eligible entities, accessed its emergency lending facility following the collapse of Silicon Valley Bank last March. According to the semi-annual Financial Stability Report, most of these institutions — 95% in fact — were smaller entities with assets under $10 billion.

Reports say the program stopped making new loans on March 11 of this year. At its peak, the program extended over $165 billion in loans. Investors and depositors will have to keep a watchful eye on the banking sector until March of 2025, when the last of these emergency loans are scheduled to be repaid.

The Truth Behind the Rising Cost of Living

The Federal Reserve tells us that, based on the Consumer Price Index, prices have only risen about 3.5% over the past year. But it sure doesn’t feel like it — and people are starting to take notice.

That’s why posts on inflation are picking up so much steam on social media lately. Our very own Alan Hibbard was struck by a post by “the Kobeissi Letter” on LinkedIn, showing common goods like milk (+40%), eggs (+40%), and beef (+51%) are all up big since 2019.

Inspired by these figures, Alan compared those numbers to the price of gold over that same time span:

While everyday essentials have seen significant price increases, it might surprise you to know that gold has outpaced them all with an astounding rise of +74% gain since 2019.

Gold is more than just a shiny asset; it’s a shield against the falling dollar. In fact, if you measured the prices of these grocery items in gold, their prices would be falling. Maybe that’s why so many people are turning to gold these days to protect their purchasing power.

The Rich History of Jewelry as Money

No one knows exactly when the first gold was first discovered by humans. But we do know the oldest, most significant gold treasure in the world was revealed in Varna, Bulgaria from around 4,600 BCE, where archaeologists found a gravesite holding around 3,000 gold artifacts and other treasures.

In China, the Shang Dynasty made gold jewelry dating back to around 1600 BCE. Across the world, goldsmiths in the Mycenaean civilization in Greece (1600 BCE) were forging gold jewelry too.

Before banks and vaults, our ancestors turned to gold to secure their wealth. But the earliest forms of currency weren’t minted coins. Believe it or not, jewelry actually pre-dates coins and bars as money in many cultures.

Why Use Jewelry as Money?

For our ancient ancestors, storing gold at home — even small amounts — was not nearly as secure as it can be today. You couldn’t leave all your wealth in your hut — it just wasn’t safe. So, most people wore their wealth in the form of gold jewelry for security reasons.

Jewelry quickly evolved as a way for people to keep their money on them safely, draped around their neck or wrist. The tradition of using jewelry as money is evident in modern currencies, like the Thai Baht, which is named after the jewelry that came before it.

In India today, gold jewelry remains the dominant form of investment. Indians prefer purchasing gold as necklaces and bracelets rather than as coins or bars. For every ounce of gold bought in coin or bar form, approximately three ounces are invested in jewelry.

Historically, jewelry has served as a secure method to transport and store your wealth.

Nowadays, consumers are often misled when it comes to gold jewelry. The truth is most gold jewelry you see in department stores isn’t “pure gold.” And it certainly won’t retain its value over time like investment-grade jewelry.

That’s why it’s important to educate yourself before you make a big jewelry purchase. These little tips could change how you think about buying gold jewelry forever.

Understanding Gold Purity: Karat Guide

When you encounter terms like “22K” or “24K” associated with gold, it’s important to know exactly what they mean. Let’s clarify: “karat” (spelled with a ‘K’) indicates the purity of gold, while “carat” (with a ‘C’) measures the weight of gemstones.

So “24-karat gold jewelry” tells you what the purity rating is, while “24-carat gold jewelry” tells you how heavy it is (which doesn’t account for impurities). When it comes to jewelry, “karat” is nearly always the implied meaning.

The purity rating ranges between 10K and 24K and, simply put: the higher the karat, the purer the gold. This table shows the gold content per karat:

Most “gold” jewelry that you see in department stores is 14 karat, meaning only about 58% of it is gold. To get the most gold for your money, look for 22K or 24K. 24K signifies 99.9% purity, the highest you can buy.

Why Choose Higher Karats?

Gold has some incredible unique properties like its malleability and resistance to tarnishing, making it ideal for crafting jewelry. However, pure 24K (99.99%) gold, while offering a richer color and higher value, is softer and more prone to scratches.

Jewelry crafted from 22K (91.67%) gold strikes an optimal balance for jewelry. The 22K gold is the same used in American Eagle gold coins, enabling designers to create intricate, beautiful designs, while still maintaining enough strength for regular use.

Meanwhile, lower karat gold, like 18K and 14K, includes even more hard metals like copper or silver, making it more durable to wear but less valuable in terms of raw metals.

High-Karat Jewelry Isn’t Just an Adornment – It’s an Investment

When you wear 22k and 24k jewelry, you’re sure to turn heads. The glowing brilliance of high karat gold is something you can truly only experience in person.

Plus, it also appreciates over time alongside the price of gold, making it a smarter gift than the more commonplace, low karat jewelry.

If you’ve ever considered adding some investment-grade gold jewelry to your collection, now is the perfect time. Tomorrow kicks off Auvere’s Mother’s Day sale where you can get incredible discounts on their finest 22K and 24K gold jewelry pieces.

Let your love for your mother shine as brightly as Auvere’s pure gold and silver jewelry. Starting tomorrow, April 27, save 15% on your purchase with code GS4MOM15 until May 7th. Auvere’s pieces are designed to capture the essence of your mother’s radiance and beauty.

That will wrap up another weekly issue of GoldSilver Nuggets. We’ll be back with more news and updates next week!