White Gold as an Investment: Reasons You May Consider It
Keep the following factors in mind when looking into diversifying into white gold or looking at white gold as a hedge to your other investment holdings.
Facts About White Gold
It Contains More Metal Than Gold
White gold is really a marketing label. Considering it a marketing concept or even "brand." If you really think about it, there is really no such thing as white gold. Gold is gold. What makes it white is the fact that gold is mixed with cheaper metals. Sure these metals look bright when the piece of jewelry is forged. But to retain its luster, white gold has to be "replenished." This requires polishing and also replenishing of the base metal component of the metal alloy. This can be quite expensive if you have to replenish it fairly frequently over several of years. At the very least, it can be quite a bit of a hassle. Keep this in mind when thinking of investing in physical white gold or white gold jewelry pieces.
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If you are investing in physical metals, white gold requires maintenance. You heard that gold tends to lose its luster and tends to be polished; well the good news is it is still gold. Compare this with silver; it tends to get discolored with time. The same is true with white gold. It tends to be discolored and tarnished with time. You have to keep it polished and maintain it in a special location to oxidize as much. These of course add to the overall maintenance cost of white gold. It gets quite costly, especially if you don't have a large amount of precious metal holdings. Keep in mind that precious metal storage units cost you money on a month to month basis.
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Long Life Expectancies
The good news with white gold is a long life expectancy. You might be rolling your eyes with this so called "advantage" because gold has a long life expectancy too. Gold after all did not become the historical and global store of value if it degrades with time. Your gold will look the same way with a need of a little polishing fifty years from now, and one hundred years from now. White gold, since it is metal, has a long life expectancy.
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Stronger Than Gold
One really positive thing about white gold, is it is stronger than gold. This is why a lot of jewelers prefer white gold than pure gold. It is always a bad idea to buy your girlfriend, your wife, your husband or boyfriend a pure gold ring. When you buy pure gold jewelry, it's just too soft. It can nick easily and it can actually warp because gold is heavy but soft. This is why jewelers prefer white gold because there are enough stronger metals alloyed with gold to keep the gold in a particularly strong form.
Confusion With Platinum
When people talk about white gold, people often don't know what they are talking about. Usually in the United States, when people say white gold, it's usually in the context of jewelry and often times it involves less precious metals being mixed with gold to give gold form and strength.
However, there is another form of white gold. In this particular setting, this phrase actually describes a more precious metal than gold. We are of course talking about platinum. Platinum is often labeled white gold because it is very bright and costs more historically than gold. If you are thinking of investing in white gold, it's probably better to invest in platinum instead of alloys mixed with gold.
When you invest in platinum, it's like you are investing in gold. It's very liquid because it is very easy to look up the current price of platinum. More importantly, there is a huge network of buyers and sellers of platinum that are more than willing to buy your platinum or sell you white gold at the prevailing price-plus a small premium or fee.
Platinum is also a great hedge against currency devaluation, runaway inflation, market crashes, economic uncertainty, so on and so forth. It basically gives you all the protection you can get with gold, except that it looks just like silver but slightly brighter.
The downside with platinum is that it costs much more than gold. Gold tends to spike up and down when it comes to pricing and you can bet platinum has a premium that goes up and down as well. When a premium difference between platinum and gold shrinks, that would be a good time to take a position in platinum. Otherwise, it is a good idea to just stick with gold.
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