Gold glitters in every form, but selling it isn’t always straightforward. Whether you have gold jewellery passed down through generations or gold bullion purchased as an investment, knowing the differences between these two forms can help you make better selling decisions.
This blog will highlight the key differences between gold jewellery and bullion in Australia, providing practical advice for anyone looking to sell their precious metal assets.
What is Gold Jewellery, Really?
Gold jewellery refers to decorative items crafted from gold, often designed to be worn. Common types include rings, necklaces, bracelets, earrings, and watches. These pieces aren’t just made of gold – they often feature complex designs and may include gemstones or other materials.
When you look at a piece of gold jewellery, you’re not just seeing pure gold. Most gold jewellery contains other metals mixed in to create a stronger, more durable alloy. This is where the concept of karats becomes important.
Karats Explained: Purity Matters
Karats measure the purity of gold in jewellery. The karat scale ranges from 1 to 24, with 24 karats being pure gold.
- 24k gold is 99.9% pure gold
- 18k gold contains 75% gold (18 parts gold, 6 parts other metals)
- 14k gold contains 58.3% gold (14 parts gold, 10 parts other metals)
- 9k gold (common in Australia) contains 37.5% gold
The higher the karat number, the purer the gold and typically the more valuable the item. However, higher karat gold is also softer and more prone to scratches and damage.
Design and Craftsmanship: Beyond Gold
The value of gold jewellery isn’t just in its gold content. Design and craftsmanship play huge roles in determining price.
A simple gold band might be worth close to its gold value, but a beautifully crafted piece from a well-known designer could be worth many times more. Brand recognition matters too – a gold necklace from Tiffany & Co. will typically fetch a higher price than a similar piece without the famous name.
Gemstones add another layer of value. Diamonds, rubies, and other precious stones can significantly increase a piece’s worth, sometimes even more than the gold itself.
Gold Bullion: Bars, Coins, and Value
Gold bullion refers to gold bars, coins, or ingots of high purity, typically at least 99.5% pure. Unlike jewellery, bullion is valued almost entirely for its gold content and weight, with little consideration for design or craftsmanship.
Bullion serves primarily as an investment vehicle – a way to own physical gold as a hedge against inflation or economic uncertainty.
Types of Bullion: Bars and Coins
Gold bars come in various sizes, from small 1-gram bars to large 1-kilogram blocks. Common weights include 1 oz, 10 oz, and 100 oz. Well-known refiners like Perth Mint, Royal Canadian Mint, and PAMP Suisse produce bars with their stamp, guaranteeing the purity and weight.
Gold coins offer another popular bullion option. In Australia, the Australian Gold Kangaroo (previously the Gold Nugget) is a favourite. Other popular coins include the Canadian Maple Leaf, American Eagle, and South African Krugerrand.
Government mints typically produce these coins, giving them legal tender status in their country of origin, though their gold value far exceeds their face value.
Purity Standards: The 99.99% Rule
Bullion purity is crucial to its value. Most investment-grade bullion is at least 99.5% pure gold, with many products reaching 99.99% purity (often marked as “.9999 fine gold”).
This high purity standard ensures that when you sell bullion, you’re getting maximum value for the gold content. Buyers can easily verify the purity through testing, making bullion transactions generally more straightforward than jewellery sales.
Selling Processes: Jewellery vs. Bullion
The selling process differs significantly between jewellery and bullion.
For jewellery, sellers must consider both the gold content and the item’s design value. This often requires appraisals from jewellery experts who can assess craftsmanship, brand value, and the condition of any gemstones.
Bullion selling is more straightforward. Since its value is primarily in its gold content, the assessment usually involves weighing the items and verifying their purity.
Finding Buyers: Jewellers and Refiners
When selling jewellery, you have several options:
- Local jewellers who may resell the piece or melt it down
- Pawn shops, which typically offer lower prices but quick cash
- Online marketplaces like eBay or specialist sites
- Auction houses for particularly valuable or antique pieces
For bullion, your best options include:
- Reputable bullion dealers like Ainslie Bullion or ABC Bullion
- Banks that deal in precious metals
- The Perth Mint, which buys back many gold products
Always do your homework before selling. Check credentials, read reviews, and get multiple quotes regardless of what you’re selling.
Valuation Methods: What’s it Worth?
Jewellery valuation considers:
- Gold content (weight and purity)
- Design and craftsmanship
- Brand recognition
- Condition of the piece
- Presence and quality of gemstones
Bullion valuation is simpler:
- Current spot price of gold
- Weight of the item
- Purity of the gold
- Any premium for rare or collectible coins
Always get multiple quotes before selling either type of gold. Prices can vary significantly between buyers, especially for jewellery.
Tax Implications in Australia
When selling gold in Australia, you need to consider both Goods and Services Tax (GST) and Capital Gains Tax (CGT).
GST Rules for Gold
Gold bullion is generally GST-free in Australia when it meets certain criteria:
- It must be at least 99.5% pure gold
- It must be in a form recognised by the London Bullion Market Association (LBMA)
- It must be traded at a price based on the current market value of gold
Gold jewellery, however, is subject to GST when sold by a registered business. This means if you’re selling jewellery to a dealer, they’ll need to factor in GST when reselling the item, which might affect the price they’re willing to pay you.
Capital Gains Tax (CGT) Explained
When you sell gold for more than you paid for it, you may need to pay Capital Gains Tax on the profit. This applies to both jewellery and bullion, with some key differences:
For jewellery, there’s a personal use asset exemption that may apply if:
- The item was used or kept mainly for personal use or enjoyment
- It cost $10,000 or less
For bullion, CGT typically applies to all sales where a profit is made. However, if you’ve held the gold for more than 12 months, you may be eligible for a 50% CGT discount.
Keep detailed records of all gold purchases and sales for tax purposes. When in doubt, consult with a tax professional for guidance specific to your situation.
Storage and Security Considerations
Proper storage is crucial for protecting your gold, whether it’s jewellery or bullion.
Home Storage: Minimising Risks
If storing gold at home:
- Invest in a quality safe that’s fire-resistant and securely bolted to the floor
- Consider hiding the safe in a non-obvious location
- Don’t discuss your gold holdings with others
- Install quality security systems, including alarms and cameras
- Ensure your home insurance covers your gold’s full value
Professional Storage: Vaults and Banks
Professional storage offers enhanced security:
- Private vaults provide high-security storage with insurance
- Bank safety deposit boxes offer good security but may have limited insurance
- The Perth Mint and some bullion dealers offer storage programs specifically for gold
- Costs vary based on the value stored and security level
Professional storage typically costs between 0.5% and 1% of the gold’s value annually but provides peace of mind and often includes insurance coverage.
Conclusion
Whether you’re selling gold jewellery with sentimental value or bullion purchased as an investment, understanding the differences between these forms of gold can help you make informed decisions.
Remember these key points:
- Jewellery value comes from both gold content and craftsmanship
- Bullion value is primarily based on weight and purity
- Tax implications differ between the two forms
- Proper storage is essential regardless of which form you own
By approaching gold sales with knowledge and careful planning, you can ensure you receive fair value for your precious metals while complying with Australian tax requirements. Whether you’re liquidating an investment or parting with family heirlooms, being informed leads to better outcomes.
