How Much Gold Should You Own?
There is no correct number, and anyone quoting one without knowing your situation is not answering your question. Here is how to think about it instead.
We are not going to give you a percentage. We are a jewellery shop, we are not licensed to advise on your money, and any number we printed would be wrong for most people reading it. What we can do is set out the questions that actually determine the answer.
Key takeaways
- There is no universally correct gold allocation.
- The answer depends on what else you hold, your time horizon and why you want gold.
- Gold produces no income, so a large allocation has a real opportunity cost.
- Jewellery you wear should not be counted as an investment allocation.
- A licensed advisor can answer this properly for your situation. We cannot.
Educational only
Vanhess is a jewellery shop in Coquitlam, British Columbia. We sell solid gold jewellery. We are not financial advisors, we do not sell bullion, and we do not forecast prices. This page explains how gold behaves so you can judge jewellery against bullion honestly. It is not investment advice. Talk to a licensed advisor about your own money.
The questions that decide it
| Question | Why it matters |
|---|---|
| What else do you own? | Gold's role is usually diversification, so it depends entirely on what it is diversifying away from |
| How long is your horizon? | Gold has had long flat and falling stretches. A short horizon exposes you to them |
| Do you need income from this money? | Gold produces none, so money you need income from probably should not sit in it |
| Why do you want gold? | Diversification, crisis insurance and speculation lead to very different amounts |
| Can you store and insure it? | Physical gold has running costs and practical problems that scale with quantity |
| Could you hold through a large fall? | An allocation you would panic out of is the wrong allocation, whatever the number |
Do not count your jewellery
Two different purchases that happen to share a material
Jewellery you bought to wear is a consumption purchase with a metal floor underneath it. Bullion is an investment holding. Mixing them in the same calculation flatters your allocation and hides the fact that you paid a large premium over metal value for the jewellery.
If you want to know your gold exposure, count the metal you would actually be willing to sell. For most people that excludes their wedding ring, and it should.
Be careful
Be sceptical of any source that gives you a confident percentage. Gold marketing material has a strong incentive to suggest a large number, and it does not know anything about you.
Frequently Asked Questions
What percentage of a portfolio should be gold?
There is no single correct answer, and it depends on what else you hold, your time horizon, whether you need income, and why you want gold. We are a jewellery shop and not licensed to advise on this. A licensed financial advisor can answer it properly for your circumstances.
Does my gold jewellery count as an investment in gold?
It has a metal floor, so it is not nothing, but it should not be counted as an investment allocation. You paid a substantial premium over the metal value for design and labour, and most people are not willing to sell the jewellery they wear. Count only the gold you would genuinely be prepared to sell.
Is it possible to own too much gold?
Gold produces no income and costs money to store and insure, so a very large allocation has a real and continuing opportunity cost. Whether a given amount is too much depends on your situation, which is exactly why this is a question for a licensed advisor rather than a jeweller.