Antiques: A precious safe investment

As the world teeters on the brink of financial collapse, investors are running out of places to shelter their investments from the tsunami that is brewing.

However, bonds and equities may have lost their popularity, but commodities such as gold and silver have continued to flourish, with prices skyrocketing. The price of gold is currently at a high, reaching $1,700 last Wednesday (November 23).

This in turn has led to an increased demand for estate and vintage pieces of jewellery, even as the overall jewellery market falters, because in times of trouble, investors are more comfortable holding a physical investment rather than in an intangible.

Investing in gold or silver jewellery not only benefits from the price of the precious metal going up, but it also appreciates with age and rarity, so you can make double the gains compared with just holding gold or silver bullion.

Additionally, since inventory is fixed and often in short supply, finding that one-of-a-kind piece could make a savvy investor a lot of money.

“You aren’t just buying precious metal, you’re buying something that’s unique. You will never see the same thing twice, which makes it fun for me as an investor,” says Olivia Gerrish, director of the Antique Jewellery Company.

The quality of modern day jewellery is just not the same, according to Ms Gerrish, who says that many modern pieces are mass produced in the far east and are therefore not made using the same, delicate, techniques as antique jewellery.

“Jewellery from the 1950s and 60s is less in vogue. The most sought-after pieces currently are those from the1920s and 1930s - the Art Deco period,” says Francois Curiel, international head of jewellery at Christie’s auction house.

“Lately there have been less of these pieces on the market, and as a result, the value has shot up to almost double or triple estimates,” he adds.

This, and a challenging economy, has prompted many jewellery collectors to unlock their safes and sell heirloom pieces they have been holding onto in an effort to gain additional income.

Recent research from insuracne group Ensure reveals that 14 per cent of Brits have bought an item of gold last year while 6 per cent have swapped treasures for cash at a ‘bling and buy’ party.

William Sporborg, managing director of Dazzling Capital, says “Period jewellery has residual value which provides not only asset backing for investors, but it’s a safe haven – especially with inflation looming.”

With growth slowing in the western world, antique jewellery can also benefit from the growth in affluence in the emerging markets - which according to Jim O’Neill, chief executive of Goldman Sachs, will be amongst the largest economies in the world by 2050.