Buying jewelry is one of the opportunities to invest in gold. Just like investing in the Stock Exchange, the objective is to try to buy cheap to sell high.
There are those who think of jewelry simply as heritage, accumulating gold, silver and the like as part of family assets.
Despite the ease of investment, the Gold present in jewelry will not always be 24k (999 parts of Gold for 1,000 parts of metal), but 18k (750 parts of Gold for 1,000 parts of metal).
Benefits:
- Having money, it’s very easy to go into a jewelry store and leave with a jewel.
- It is easy to store and can even be used if the jewelry buyer so desires.
Disadvantages:
This is an uncommon modality and it has its difficulties due to several issues such as:
- Need to assess the quality of the jewelry at the time of sale.
- Every piece of jewelry kept at home needs a very safe place to avoid prying eyes.
- The price obtained when selling gold through jewelry is not always fair, depending on the appraiser ‘sexpertise
- Unpractical investment option.
- The correlation with the Gold price is not very strong.
Pledge Of Jewelry (Gold)
Who owns jewelry or gold bars can use the pledge as a form of capitalization .The operation is much more advantageous than a personal loan, for example, since the jewelry serves as collateral for the loan made from the pledge.
This is a non-traditional way, since capitalization may not exactly be considered a form of investment, but I decided to put it in the article, since it involves gold bars.
Conclusion: Not Recommended for Investments!
Buying Gold Through Auction Sites
Famous auction sites such as Mercado Livre and eBay (links to the gold section of these sites) offer opportunities to buy both jewelry and gold coins and bars.Despite the wide variety of options and prices, one must be very careful when buying gold through these sites, as informality is high and the quality of the material cannot always be trusted.
Benefits:
- Convenience of buying online.
Disadvantages:
- Quality of the material sold depends on the seller’s credibility, which is not always reliable.
- High prices compared to the price of Gold on the BM&F.
- Lack of standardization of the material.
- Difficulty in resale, since you would have to follow the same path as your purchase, advertising on this type of site.
- The Purity of Gold sold (18k, or 750 parts of gold for every 1,000 parts of the metal) is different from gold on the BM&F (24k, or 999 parts of gold for every 1,000 parts of the metal).
Conclusion: Not Recommended for Investments!
Buy Gold Through Securities Distributors
There are now some brokerages and securities dealers (DTVMs) that create products from 250g gold bars and contracts, selling small quantities (1g to 25g) in laminated cards and bars of different sizes.
The products are based on the gold price of the day plus a premium (surcharge) defined by the distributor. All are standardized, certified and sealed.
Benefits:
- Convenience of buying online.
- Ease of transporting and storing gold (mainly cards, with the same format as credit cards).
Although the option appears to be attractive, it has some strong disadvantages that are worth mentioning:
Disadvantages:
- Warranty on Gold Resale. Before closing any deal with a securities dealer, check its history and warranty conditions.
- High Costs. From insurance, freight to the spread (difference) between the price of bars and gold on the BM&F, it becomes very expensive to invest through this modality. I myself have invested through this type of investment and doing the math I realized that the costs sometimes reached 10% of the amount invested.
- Reselling is Physics. As you receive Gold in your house, to sell it you need to go to one of the securities dealerships, most of which are located in São Paulo. The spread between the BM&F Gold price and the price of your gold bar is also present at the time of sale.
Costs To Invest In Gold
- Brokerage
The application is also subject to the collection of a brokerage fee, which varies according to the contracted brokerage. Generally, the fee is in the range of 0.2% of the total amount involved in the transaction.
- Custody
The Exchange charges the custody fee and transfers it to the custodian bank. 0.07% per month is charged , calculated daily on the position held by the investor, according to the following methodology:
Daily Custody Fee = (maximum gold price on the day x 0.07% x balance in grams)/ 30 days.
Example:
- Maximum Value of the Day: BRL 100.00
- Exchange Standard Rate: 0.07%
- Balance in Grams: 250 (g)
- Dias: 30
BRL 100 x 0.07% x 250 / 30 = BRL 0.58 . (Daily fee)
These amounts are calculated daily and accumulated to be paid on the fourth business day of the following month, or when the investor resets the position.
Will I Have To Pay Tax On The Gold I Sell?
As it is considered variable income, gold as a financial asset is exempt from income tax up to the limit of R$ 20,000. In this case, it enters the statement as “Exempt and Non-Taxable Income”.
If the sale exceeds R$ 20,000 , the rate is 15% on the capital gain.