Commodities: Rock of ages, value changeable

THIS may be the year that you decide to buy a significant piece of jewellery for a loved one, or for yourself. But once you've made the decision to part with the money, selecting jewellery is not as straightforward as it might seem.

You must consider cost, design, size of stones, which precious metal they should be set in, and the quality of the work and materials. Perhaps most important, you want to be assured that what you buy will be a good, long-term investment.

You may ask what makes a sound jewellery investment. Oddly, the organisations that market precious metals and gems, such as the World Gold Council and De Beers, the diamond cartel, do not recommend jewellery as an investment.

This may be because it is illegal to give investment advice in the UK without authorisation. But their position is that once a precious metal or diamond is transformed into jewellery, the subjective appeal of fashion alters its value forever.

The resale price of a given piece sometime in the distant future will depend on fashion trends and the vagaries of the jewellery marketplace, so it is impossible to predict. If you decide to sell your treasure, you are gambling that its design is going to be popular at that particular time.

A De Beers spokesman says of a piece of diamond jewellery: 'It isn't an investment, and it shouldn't be considered as such.' The only advice De Beers gives is to buy it because you like it.

But what about Elton John, who last week sold part of his jewellery collection at a Sotheby's auction - including diamond-rimmed specs, diamond-encrusted brooches, a gold pendant, a diamond ring - and received pounds 750,000 for the lot? It's most unlikely that investment value did not occur to anyone attending that sale.

Obviously, some jewellery bought in the past has proved to be a good investment for its owner. John Pyke, chairman of the National Association of Goldsmiths and owner of Pyke & Sons, jewellers in Liverpool, says the demand for antique jewellery is far greater than the supply. Albert watch chains, long gold key chains, and Edwardian diamond set jewellery are especially popular.

John Benjamin, director of international jewellery at Phillips, the auctioneers and valuers in Bond Street, says that prices in old stones and jewellery at the top end of the market are very robust: 'In 1994 and 1995, period jewellery will probably be the leading commodity in the sale rooms.' He reckons that jewellery fashions are returning every 30-odd years. In other words, save those heavy white-gold pieces from the 1970s.

What few retailers advertise is that new jewellery prices reflect the highest value a piece is ever likely to have. As with a new car, once most jewellery is taken out of the shop its value depreciates.

At auction houses like Phillips, however, because both the jewellery trade and the public are buying and the items for sale are not new, prices can be lower than the equivalent retail prices. Phillips holds monthly jewellery auctions, where prices start at pounds 200 but can exceed pounds 50,000.

In reality, most people never do sell their good jewellery, because it becomes personal to them and they want to keep it in the family.

But if you do, timing is everything and you may be disappointed. Let's say you want to sell Aunt Martha's ruby necklace from the 1950s. A jeweller's offer will depend on his supplies, how the style of the piece fits in with his other merchandise, how long it will take to sell, how much he can make on it, and the weight and quality of the gems and metal.

One buyer who found a small, gold diamond ring last spring found the market highly variable. He took it to several jewellers to see what price he could get for it.

In London's Bond Street, two or three jewellers offered him pounds 100 to pounds 200. In Hatton Garden jewellery district in east central London, four or five places offered him between pounds 150 and pounds 200. But when he took the ring to Bournemouth, two shops offered him pounds 325 and pounds 400.

But the intrinsic value of the raw materials in jewellery means that the piece will always hold some value if it remains in good condition. The higher the carat, or weight, the higher the value.

Since there are no guarantees on the lasting value of new jewellery, a potential buyer should:

Buy jewellery from a reputable, established and professional shop.

Compare prices in several shops and inquire about quality and colour. It will help you to make the best purchase.

Buy something wearable. It will stand the test of time better.

Buy the best quality you can for the price you can afford.

Mr Pyke says: 'You should buy it because you like it . . . But it may be that in the fullness of time, it's a winner.'

(Photograph omitted)

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Trainee Consultant - Surrey/ South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before