By Christiani Tumelap
\nContributor
\nThe Jakarta Post<\/p>\n
Gold jewelry saved Martha, 38, and her husband, Doni, 40,
\nduring the peak of the country's economic crisis in early 1998
\nwhen both lost their jobs as a secretary and a banker.<\/p>\n
Martha sold her gold jewelry to cover their household needs
\nand her hospital expenses for the delivery of her second child.<\/p>\n
Martha, who likes to wear gold \"for the sake of fashion and as
\na personal statement\", said she made enough cash as her jewelry
\nwas valued very high due to the severe depreciation of the rupiah
\nto the U.S. dollar at the time.<\/p>\n
\"If not for selling my gold, I don't know how we could have
\ncoped with the situation. I've sold all my jewelry, including my
\nfavorite sets of gold necklaces, bracelets and earrings with
\ndiamonds and rubies, which was a present from my parents. Now
\nthat we both have new jobs, I'm trying to start buying gold
\nagain, one piece at a time,\" she told The Jakarta Post.<\/p>\n
During times of high inflation or when a country is facing a
\nsevere political crisis, or worse, the possibility of war, many
\npeople rush to the jewelers to buy necklaces, bracelets or rings
\nbefore the price surges. Or like Martha and many other people, to
\nsell their jewelry in hopes of making a profit from the price
\ndifference.<\/p>\n
People know that gold does not lose its value in such a
\ndramatic way that currency does, so they can resell gold and
\nstill make a good return on their investment.<\/p>\n
\"The value of the rupiah declines in line with the increase of
\nthe price of commodities. But the value of gold, even in rupiah,
\nnever goes down. In fact, when the rupiah was weakening against
\nthe dollar, the price of gold went even higher,\" Marcia Moniaga,
\nthe promotion manager for the World Gold Council Indonesia, told
\nthe Post.<\/p>\n
She said keeping gold as an investment was wise because the
\nmetal carries less risk compared to other investment
\nalternatives, like stocks and properties. It is also physically
\nresistant to fire or water.<\/p>\n
Gold has also proven to be one of the few effective investment
\ninstruments to beat inflation. The higher the inflation, the
\nbetter the price of gold will be. Gold's value, however, tends to
\nremain constant when the inflation rate is low and may decline a
\nlittle if the inflation stabilizes at a single digit.<\/p>\n
For many people, high inflation or low gross domestic product
\n(GDP) means nothing when it comes to buying gold. When the
\nIndonesia's GDP was down by 0.72 percent in the fourth quarter
\nlast year, gold sales instead increased by 19.2 percent to 31
\ntons in the fourth quarter from 26 tons in the third quarter.<\/p>\n
\"Indonesians have loved gold for a long time. They see it as a
\nstatus symbol and investment, too, that's why people like to give
\ngold jewelry to their children and grandchildren,\" Marcia said.<\/p>\n
Dave Deepak, the first certified gemologist in Indonesia and a
\nlong-time executive at the Indonesian Gold and Jewelry Traders
\nAssociation, said people should not buy gold jewelry just because
\nthey wanted to turn a profit the next day or week when they
\nresell it.<\/p>\n
\"The main thing people should benefit from owning gold jewelry
\nis the satisfaction of wearing it,\" he told the Post.<\/p>\n
Dave, who runs the Dee Chan jewelry store and manufacturer,
\nsaid for most people, the primary function of gold jewelry was
\nstill as a status symbol. Although in the long run, gold jewelry
\ncould yield an adequate profit for the owners, he added.<\/p>\n
\"It'll give you a good yield only in a long-term period, it's
\na long-term investment. Owners can make a profit from the
\nexchange rate difference at the time they resell the pieces and
\nthere is an increase in the appreciation value of gold,\" he said.<\/p>\n
\"If you really want to make a good investment in gold, you had
\nbetter buy gold bullion, which is the purest form of gold and
\ntherefore has the highest value, instead of gold jewelry. Gold
\ncoins are also a good option,\" Dave said.<\/p>\n
Gold bars and coins bear the 999.9 mark, which describes the
\npurity of gold concentrate.<\/p>\n
Gold coins are also popular, but mostly among collectors.
\nApart from rare imported gold coins, such as the limited edition
\nBhutan Millennium Dragon coins or John F. Kennedy Commemorative
\ncoins, you can also buy the recently launched Soekarno series at
\ncertain traders or the ONH gold coins, which come in weights of
\none, five and 10 grams.<\/p>\n
The fact that gold bars hold their value better than jewelry
\nis clearly reflected in the price difference, Dave said. The
\nprice of a gold bar is about Rp 90,000 (about US$9.50) per gram,
\nwhile jewelry is about Rp 70,000 per gram.<\/p>\n
People should be aware that when they buy jewelry, the price
\nthey pay covers not only the value of gold or the gem, but also
\nother costs, such as workmanship, design and brand. However, when
\nthey resell the jewelry to traders, the price no longer includes
\nthe cost of workmanship.<\/p>\n
As for gold bars, people get the exact market price whenever
\nthey buy or sell because there are no other costs involved. And
\nany gold jewelry trader will take your gold bars or coins for
\nsure.<\/p>\n
Dave said that despite the higher value of gold which is not
\nin the form of jewelry, not many stores sell gold bars or coins
\nbecause demand was so far mostly for gold jewelry. For this same
\nreason, Dee Chan focuses on selling gold jewelry set with gems.<\/p>\n
He said in the past many people kept gold bars as personal
\nassets. But during World War I and II, people started to realize
\nthat their gold bars were not easy to conceal as they fled their
\nvillages seeking refuge from enemies. The only valuable thing
\nthey could carry everywhere was jewelry.<\/p>\n
Today, for practical reasons, many people prefer to buy
\nwearable gold jewelry. Dave suggests people buy gold jewelry that
\ncontains only a higher concentrate of gold if they are thinking
\nof reselling it later.<\/p>\n
The best form is 24 carat, which contains the highest
\nconcentrate of gold at 99.9 percent. The second best is 22 carat,
\nwhich contains 91.6 percent.<\/p>\n
Jewelry made from 24 carat gold is automatically the most
\nexpensive. Less expensive gold, which is 18 carat, 14 carat and
\n10 carat, each has a purity concentrate of 75 percent, 58.3
\npercent and 41.6 percent respectively.<\/p>\n
Is now the right time to buy gold jewelry? \"For gold, the
\nanswer will always be the same: yes. Buying gold bit by bit on a
\nregular basis is better and you can avoid getting stuck with high
\nprices,\" Marcia said.<\/p>",
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