You have no doubt read countless articles on the price of gold costing “x dollars per ounce” and possibly own a gold ring or some other piece of gold jewellery but do you really understand exactly what you are buying? What’s the difference between 1 troy ounce of gold and 1 (regular) ounce? What’s the difference between 18 and 10 karat gold? Let me explain. Words: 637
So says Lorimer Wilson (www.FinancialArticleSummariesToday.com) and editor ofwww.munKNEE.com. Please note that this paragraph must be included in any article reposting with a link* to the article source to avoid copyright infringement. Wilson goes on to say:
The term used to describe the unit of measurement for the proportion of gold (i.e. % purity of the gold content) in a piece of jewellery, coin, ingot or bar as per the above table.
Gold will often be mixed with “filler metals” such as silver, palladium, platinum, nickel and even copper to combat the softness of pure 24 karat. Gold which contains a degree of silver, platinum or palladium is referred to as ”white gold” and will classify with a higher amount of karats while the presence of nickel leads to a slightly lower designation of karats. Copper is used to give gold durability and give it a golden rosy tone. Below is a table outlining the karat designations at various gold purity levels plus the extent of ”fineness” as is used in some countries such as Italy.
|Karat/Fineness||Gold Content [Purity]
(In some countries “karat” and “carat” are used almost interchangeably although, strictly speaking, the words’ correct meanings are as defined in this article where “carat” refers to the weight of a gemstone (see below). The correct word to use when referring to the weight of an object of gold, silver or other precious metals is to speak in terms of troy ounces as below, kilos or metric tonnes.)
100% pure gold is defined as having a purity of 24 karats so if something is 24 karat gold then it’s made of gold and nothing else – regardless of size… Gold is a relatively soft metal and high-karat gold tends to be easily damaged and, as such, a 24 karat item is usually reserved for display or ceremonial use as the picture of me with “my” 100kg. Canadian Maple Leaf 99.99999% pure gold coin which is now worth in excess of $4,500,000 USD! (100kg. x 32.1507466 troy oz. x $1,400/ozt. USD)
munKNEE.com Editor-in-Chief Lorimer Wilson with the world’s first 100-kg, 99999 pure gold bullion coin with a $1 million face value. It was produced by The Royal Canadian Mint.
All jewellery is required by law to be stamped so consumers will know the quality of gold used. Jewellery made in North America is typically marked with the karat grade (10K, 14K, etc.), and jewelry made in Italy is typically marked with the “fineness” such as (417, 583, etc.). Most retail gold items have a karat rating in the range 9 to 18. In the U.S. the minumum karat value for an item to be sold as gold jewelry is 10. In the UK 9 karat is more common.
The number 24 may have originally been chosen to represent pure gold because it divides evenly by 2,3,4,6 8 and 12. Thus it’s easy to talk about a gold item being half pure (12 kt), two thirds pure (16kt) etc. Nine karat would thus be three eighths gold, 18 karat would be six eighths (three quarters).
Definition of a ”Troy” Ounce
The troy ounce (ozt) is a unit of imperial measure most commonly used to gauge the weight and therefore the price of precious metals. One troy ounce is equivalent to 1.09714 avoirdupois (our conventional every day measurement) ounces i.e. 9.714% greater in weight and 1 kg. consists of 32.1507466 troy oz.
Please keep the distinction between ounces and troy ounces in mind when buying small quantities of gold and/or silver.