Why gold jewellery is a poor investment despite its shine, sentimental value

Dubai: For centuries, gold has held a deep cultural and emotional value—especially in the UAE, where gifting or wearing gold jewellery is a tradition tied to weddings, festivals, and family wealth. But while gold may sparkle on your wrist or neckline, it rarely shines as an investment.

Here’s why: gold jewellery is more like fashion than finance.

Yes, gold holds value and offers liquidity during emergencies. It can be sold almost anywhere in the world. But when it comes to building long-term wealth, buying gold jewellery is not the smartest financial move.

Let’s say you buy a necklace for Dh10,000. That price includes not just the value of gold, but also making charges, design premiums, and sometimes even brand markups. These can easily add up to 10%–25% of the cost. (Check live UAE gold rates here.)

Now, when you try to sell that same necklace—even if gold prices have risen—you’ll likely only get paid for the pure gold content, not the design or making charges. On top of that, jewellery that’s been worn often has small dents or damage, reducing its resale value further.

So, even if gold rates go up, your returns may barely break even—or worse, fall short of inflation. That’s not what you want from a solid investment.

Another reason gold jewellery falls short as an investment? It doesn’t generate income. Unlike stocks that pay dividends or property that earns rent, gold just sits there. Whether it's in your locker or around your neck, it doesn’t contribute to wealth creation.

In fact, if you consider storage costs, insurance, or bank locker fees, gold can become a liability. Your money remains locked up in a non-productive asset, missing out on better opportunities elsewhere.

To be fair, gold does play a role in a balanced investment portfolio. Financial advisors often suggest allocating 5%–10% of your portfolio to gold—mainly in digital or investment-grade formats like gold ETFs, gold bonds, or mutual funds that track gold prices. These are more cost-effective, easier to trade, and avoid the hassles of physical storage.

Physical gold can also offer some peace of mind in times of global uncertainty. In worst-case scenarios—like wars or financial system collapses—gold’s universal value can be a life-saver. But how likely is that scenario for you?

Would you really base a long-term investment strategy on the fear of apocalyptic events? Probably not. Most people are better off treating gold jewellery for what it really is—a wearable luxury, not a wealth multiplier.

In many households, especially in the region, it’s common to buy a gold coin every year or accumulate jewellery for a child’s future wedding. But it’s worth asking: is this tradition still serving your financial goals?

If the goal is security or future savings, there are far better tools available—like savings plans, retirement funds, or investments in diversified portfolios. Some newer options, like jewellery rental services, even allow you to enjoy wearing gold for special occasions without the heavy upfront costs.

As we modernise our lifestyles, maybe it’s time to rethink how we view gold. Just because something glitters doesn’t mean it grows your money.

Buying gold jewellery should be seen as spending, not investing. It’s like buying an expensive handbag or designer watch—you enjoy it, you use it, but you don’t expect it to grow your wealth.

So before your next gold purchase, ask yourself: Am I investing, or just indulging?

In the UAE, where gold is both sentimental and accessible, it’s easy to blur the lines. But clear financial thinking starts with recognising that gold jewellery is best enjoyed on your wrist—not in your investment portfolio.