Instead of keeping their savings in a bank and allowing the value to erode with inflation, the women of older generations chose to wear it. But gold is more than a status symbol for the Alhajas selling lace in Idumota; it’s one of the oldest and most enduring means of storing wealth.
Unlike other forms of investment (such as cryptocurrency or stocks), gold’s value isn’t tied to any specific currency, and it’s one of the best options for financial security since it either holds its value or increases with time. Plus, you get to slay and invest at the same time. Diamonds aren’t really a girl’s best friend; gold is.
From coins to jewellery, there are different kinds of gold, and as a beginner, it can be easy to make mistakes when buying investment-grade gold. We spoke to Ikotun Abigail, an experienced gold dealer, who shared five critical things you should know before making your first purchase.
1. There is ‘Gold’, and there is Gold
We often hear the phrase ‘24 karat gold’ thrown around in the media, but a lot of people don’t know what it really means. Gold is one of the softest metals on earth. To make it strong enough to wear, manufacturers add other metals like copper and zinc to it during the refining process. There are different purity levels of gold depending on the amount of other metals mixed into it.
Gold pieces labelled 24k are made up of 99.9% gold, 22k pieces contain about 92% gold, 18k pieces contain 75% gold or more, 14k pieces contain 58% gold, while 10k pieces have the lowest concentration of gold at 42% or less. The value of gold is determined by how pure it is. Investment-grade gold is around 18k-24k in Nigeria. Anything below 18k is decorative gold.
Abigail mentions that the most common mistake investors make when buying gold is accepting whatever a dealer offers as ‘gold’ without asking about its purity levels. She mentions that you can find stamps indicating gold’s purity on the hooks of earrings/chains, or backs of pendants. To be safe, you should always purchase gold from a reliable vendor, and you should ask the seller to test the gold in your presence.
2. You Pay for Craftsmanship When You Buy Gold as Jewellery
There are three kinds of gold: bullion, coins and jewellery. Bullion refers to pure gold bars, while coins are government-issued coins that typically come in 22k-24k, but since very few people are wealthy enough to have blocks of gold sitting in a safe somewhere, the most accessible form of gold in the market is gold jewellery.
What most people don’t know is that when selling gold, decorative gems and stones contribute to the total weight vendors measure, but when reselling, buyers remove the gems and only attach value to the weight of the gold itself. While it’s fine to want your jewellery to be trendy instead of the large pendants that older women wear, it’s best to buy solid gold pieces without the rhinestones.
Workmanship also influences the prices of gold jewellery. This is why a Cartier bracelet would cost slightly more than a solid gold bracelet from a less-known brand.
3. Gold Doesn’t Do Well as a Short-Term Investment
Gold is not a ‘buy today, sell tomorrow’ kind of investment. There’s a reason many gold owners hold pieces for as long as ten years or more. Even though gold is easy to liquidate when you need money, reselling within a short time frame can incur a loss. It’s advisable to only invest funds you plan to hold in savings for at least two years.
In demonstrating that profitable gold can be a long-term investment, Abigail notes that she sold 21 grams of gold for ₦840k to a customer in 2022. The same gold was resold in 2024 for ₦1.7 million, doubling the original investment.
4. Wearing Gold Can Be Less Risky Than It Seems
One of the most common concerns people have about buying gold is security. Gold is a physical asset, and it can be scary to wear your savings around your neck. The best way to store gold would be in bullion or coins in a secure location such as a bank, but when gold is in the form of jewellery, a common hack for keeping it safe is to choose pieces that are hard to misplace, like anklets, bracelets and necklaces.
Buyers also share concerns about making themselves a target for thieves, but the truth is, gold is one of the easiest things to imitate. It’s hard to tell when a piece of jewellery is real by sight alone. Whether gold looks bright yellow or more pinkish depends on the metal it was mixed with. Most robbers rely on the wearer’s location and status, the design of the jewellery (thick chunky pieces attract more attention) and inside information. Most people won’t know that you’re wearing gold unless you tell them or you post the transaction receipt on your Snapchat story. In certain instances, it can be easier to keep your gold safe than your mobile phone.
5. You Can Start Investing with as Little as One Gram
Unlike shares, which only begin to pay you significant enough dividends when you have a lot of them, you don’t need huge quantities of gold to hold a sizeable investment in it. According to Abigail, you can start investing with as low as ₦160k, and a lot of vendors allow for instalments. Each gram of gold maintains its value regardless of how much you own. Whether you choose to continue building a collection or stop at your first piece does not matter.
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