Should I Invest In 22kt Gold?

Any investment should be made after careful consideration of all risks and benefits, and most importantly, whether it has the potential to make the returns that are specific to your personal investment goals.

In this article we will explore what 22kt is, how it became popular and the common uses of it today, and the benefits and risks associated with investing in 22kt gold, to give you the basis of information you will need to make your decision.

What Is 22kt Gold?

22kt Gold is equivalent to 91.6% fine gold, with the remaining 8.4% being made up of an alloy mix of metals. Gold, in its purest form, is a soft and malleable metal, which is why it is often mixed with other more durable metals, such as copper and silver, in order to increase its strength and integrity to make it suitable for everyday wear/use.

The purity of gold is measured using a Karat Scale, the highest being 24kt gold, which has a minimum of 99.99% pure gold, or has all 24 parts being gold. 22kt gold is made up of 22 parts fine gold, and 2 parts other metals. As your get lower down the karat scale, the purity of the gold decreases and its properties change, becoming paler in colour, stronger and more suitable for different applications.

Gold as intrinsic historic value, being used for thousands of years as currencies, jewellery and even to decorate structures and landmarks. Gold’s value lies in not only in its luxurious and lustrous appearance, but also its ability to retain its value in times of economic turbulence, and its successfully performance as a hedge against inflation.

Why Is 22kt Gold So Popular?

22kt is the most popular high karat gold due to its resonance in cultures all over the world, having a strong presence many different cultures, traditions and religious ceremonies. Gold symbolizes wealth, purity, good fortune and status, however its properties don’t make it suitable for everyday wear and use: this is where 22kt came in. It allowed people to still have the high shine and bright yellow look of pure gold, without sacrifices integrity of jewellery or going coins that it was used for.

One of its most recognizable forms is in modern day bullion. Different coins around the world, such as the British Sovereign, the Krugerrand, the modern American Eagle and the Britannia. The choice to strike these coins in 22kt is because 22kt gold offers a good balance between durability and intrinsic value of gold. For example, the sovereign coin was originally used for trade and investment purposes, equal to £1. It later separated from this and is now typically used as a bullion coin due to the high value of gold. By mixing the gold with small amounts of copper and silver, it made the coins suitable to be used for their original purpose of legal tender by making them more durable but maintaining their high intrinsic value and shiny gold look.

In many cultures, gold is seen as a symbol of purity, prosperity and good fortune, which makes it commonly used in wedding ceremonies. The brides are adorned with intricate designs of 22kt gold, sets being made up of necklaces, rings, bracelets, bangles and headpieces. This can be seen in many cultures in India, the Middle East, China and Africa.

Is 22kt Gold A Good Investment?

While 22kt gold doesn’t match 24kt gold’s level of purity and benefits that it carries, it is still an excellent investment instrument used to diversify your investment portfolio. It is still made up of 91.6% fine gold, meaning it has high returns when even being sold at scrap value against the gold price. Bullion coins often carry higher premiums when reselling due to their collect-ability.

The general consensus among bullion dealers is that while 24kt investment grade gold is the optimal choice if you are choosing to invest purely in the intrinsic value of the gold, investing in 22kt bullion coins can be a good way to spread out your investment in a similar lower risk way.

The benefits of investing in 22kt gold bullion is as follows:

• High Purity: The high purity of gold maintains its value in times of economical and political turbulence.
• Durability: 22kt Gold is allowed with stronger metals, making it more resistance to damage caused by handling or wearing
• Global Recognition: Gold is recognized all over the world and carries its value into all countries, and even 22kt coins and their names are well-known, making them easily liquidated all over the world.
• Tax Advantages: 22kt Gold bought in the form of sovereigns and brittanias in the U.K., it carries no capital gains tax as it is considered legal tender.

Things To Consider When Investing In 22kt Gold:

As with all Investments, there are things to consider when weighing the pros and cons to making sure it suits your investment goals:

• Price Volatility: The price of gold is known to fluctuate, being influenced by socioeconomic factors and current events. This can cause the price of your 22kt gold to fluctuate. However, although dips can occur, the price has increased over time.
• Premiums: with 22kt gold investments, the form that come in is more labor intensive than 24kt gold bars, pushing up the manufacturing costs and premiums.
• Storage and Security: Owning physical gold requires secure storage, to prevent damage that could result in loss of value. Safes and storage facilities incur further costs, and without them you could be exposed to the risk of theft. However, many investors consider the physical aspect of gold a pro of owning it: it is a physical item that belongs to you and can be stored how you choose.
• Potential Liquidity Risk: Although gold is considered one of the most liquid assets in the world, actually liquefying it can be tricky. If you are not somewhere that can provide a gold buying service, it might take you longer to withdraw your funds your investments. This can be a risk if you need your funds back quickly.

Concluding Points:

In conclusion, 22kt gold is a valuable and tangible asset to broaden your investment portfolio, offering protection in times of economical uncertainty and inflation. Like all investments, it carries its own risks and benefits that should be carefully weighed and considered before making any investment decisions.

Where To Sell Your 22kt Gold:

If you are looking to sell your 22kt gold, SMP is the place to go! With a reputation of offering some of the highest rates in the industry, we provide a transparent service of turning your unwanted gold into cash!

We guarantee fair and competitive pricing based on the live gold price, ensuring you get the best value for your unwanted gold in any form! Click below to see what we would offer you for your gold today!