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Stocking gold can be a means of protecting wealth from the risk of arbitrary loss. Trading in jewellery can also be a very lucrative business especially in a world where fashion trends hold sway. For this reason, a lot of people dabble into this business without properly considering the pros and cons involved.
Before venturing into a jewellery business where prices of commodities largely depend on crucial factors like foreign exchange and interest rate, it is pertinent to look at the dynamics involved and weigh your opportunities. For example, as gold is traded in US dollars, there is foreign exchange risk for gold investors buying in other currencies such as the pound sterling and euro.
Again, the price of gold is often determined by interest and inflation rates. Thus selling gold requires high level of money market awareness. A possible increase in interest rate over the inflation rate portends a drop in gold price. This situation could prove difficult for those who have a large stock of this precious metal, and could amount in heavy loss if the margin is not reduced.
This also impacts the overall price of jewellery. One other factor which makes jewellery more expensive than precious metals in their original form is the amount of work put in by goldsmiths. By the time you factor in the amount of work and time they put into crafting these metals into bracelets, rings and necklaces, you’d be having like double the price. This explains why an ounce of gold is cheaper than the same amount of jewellery.
However, it is easier to sell jewelleries (which are end products) than gold coin or bars. The ability to sell jewellery online has also expanded the jewellery market beyond unthinkable boundaries. Nowadays, it is easy to buy expensive jewellery on ecommerce sites like eBay or Snapdeal, as an estimated 2 million people shop online for jewellery every day.
Also, while selling jewellery can be very lucrative, it can also be very competitive. Therefore your attention shouldn’t be focused on getting the best jewellery collection alone, you should also think about important aspects off business like creating a reputable brand and attracting loyal customers.
For those buying jewellery for the first time, identifying a genuine piece can be a tough deal. However, this process has been demystified as there are easy techniques that you can easily use to differentiate original from fake, as well as the amount of purity.
A quick way to determine the originality of these precious metals is by testing them with a magnet bar. This is because gold and silver are not magnetic. However, you should be careful not to get confused if your gold bracelet, for example, has been embellished with other pieces of materials such as steel. In this case, it will have a certain level of magnetism.
Generally, the business of buying and selling jewellery is very interesting and lucrative, you only have to learn the rules of the game and play by them. This will ensure that you always get top-notch quality, and avoid scams. And when you consider that buying can be easier than selling jewellery, you’ll want to put everything in place to break even.