What is gold bullion jewelry?

When it comes to gold jewelry, purity is an important factor to consider. Mainstream western jewelry shops usually sell jewelry that is 18 karat gold or less. Eighteen carat gold has a gold content of less than 75%. Gold bullion jewelry refers to 22 karat or 24 karat gold.

KaratPurityHallmark
2499.9%999
2291.7%916 or 917
1875%750
1458.3%583 or 585
937.5%375
Gold purity and hallmarks

Advantages of buying bullion gold jewelry

  • Beautiful color
  • Never tarnishes
  • Hypoallergenic
  • Investment
  • Portable asset
  • Brownie points

Buying bullion gold jewelry has its advantages. The color of pure gold is absolutely amazing, and photographs don’t do it justice. Unlike silver, bullion gold never tarnishes, it always looks fabulous. Pure gold is also hypoallergenic.

The high gold content of bullion jewelry means that it can be considered to be an investment. Additionally, it highly portable and may be transported across borders without being required to to declare it.

Disadvantages of buying gold bullion jewelry

  • Bends easily
  • Scratches easily
  • High premium over gold spot price

The problem with high karat gold bullion is that it does bend and scratch very easily. Bangles usually become warped with wear. If you are considering buying bullion jewelry for regular wear, earrings or necklaces are best suited for this type of gold.

The softness and malleability of pure gold means that the type of fastening is an important factor to consider since losses due to breakage of the fastening can be very expensive.

Ideally, the jewelry would have no fastenings at all. That is possible for long necklaces or single piece bangles. For gold bullion earrings, screw fastenings are highly recommended as they tend to be very secure. For short necklaces or bracelets, the “S hook” is is a reasonably secure, simple fastening.

Creating gold bullion jewelry requires much more workmanship than is needed to make gold bars and coins. This is the reason that the premium over spot for gold bullion jewelry is high, often over 30% over spot.

Although the premium may seem quite high, it is still good value when compared to standard lower karat gold jewelry sold in mainstream stores. For example, the cost structure for a $500, 24 karat gold ring consists of $385 dollars for the gold and $115 for other costs such as manufacturing, design, operations, and overheads. The cost structure for a low karat gold ring (18 karat gold or less) might be $115 for the gold content and $385 for the other costs. Bullion gold jewelry is therefore gives you a better deal, particularly in terms of resale value.

Where to buy gold bullion jewelry

In western countries, there are very few places that sell gold bullion jewelry. Goldsilver.com and mene.com are reputable online sources of gold bullion jewelry. Some big cities in western countries have Indian or Chinese jewelry shops that sell high karat gold jewelry. Alternatively, if you are traveling in the Middle East or Asia, you will easily find shops selling bullion jewelry. For example Dubai has a whole area dedicated to selling gold, called the gold souk.

The styles of jewelry will differ depending on the source. The online sources mentioned tend to sell western style jewelry with simple designs. In contrast, Indian jewelry tends to be very ornate. Note that that the more complex the design, the higher the premium over spot.

Although prices for gold bullion jewelry from online sources are not negotiable, physical stores do provide the opportunity to negotiate. The price of gold bullion jewelry has two components. The spot price of the gold content is fixed you cannot be negotiated. The second component is the labor premium or making charge, and that component can be negotiated. Be sure to take your negotiating skills along with you when buying gold bullion jewelry from a physical store!