Gold Purity Explained: 24K, 22K, 18K and Fineness

Two gold coins can weigh exactly the same and be worth very different amounts. The difference is purity. Understanding how purity is expressed, and how it interacts with weight, is the single most useful piece of knowledge a new buyer can acquire. It protects you from overpaying and lets you compare products that look nothing alike on paper.

Karat versus fineness

Karat is an old system that divides gold content into twenty-fourths. Pure gold is 24 karat, meaning 24 parts out of 24 are gold. 18 karat means 18 parts out of 24, or 75 per cent. Karat is still dominant in jewellery, particularly in the United States, India and the Middle East.

Fineness, sometimes called the millesimal system, expresses purity in parts per thousand. It is the standard used for investment bullion. A bar marked 999.9 is 99.99 per cent pure — often called four nines. A Krugerrand marked 916.7 is 91.67 per cent pure, the exact equivalent of 22 karat.

• 999.9 fine — four nines, modern investment bars and most sovereign coins
• 999 fine — three nines, still standard for many silver and gold products
• 916.7 fine — 22 karat, used for Krugerrands, Eagles and British sovereigns
• 900 fine — historic European and American gold coinage
• 750 fine — 18 karat, high-end jewellery

Why some bullion coins are deliberately impure

It seems counterintuitive that a flagship bullion coin like the Krugerrand or the American Gold Eagle would be alloyed rather than pure. The reason is durability. Pure gold is remarkably soft: a 999.9 fine coin will pick up scratches and dings from ordinary handling, and its edges can deform. Adding copper, and sometimes silver, produces a coin that survives circulation and stacking.

Crucially, an alloyed bullion coin still contains a full troy ounce of fine gold. A one ounce Krugerrand weighs 33.93 grams gross but contains exactly 31.1035 grams of gold. You are not getting less metal; you are getting the same metal in a tougher package. That is why a Krugerrand and a Canadian Maple Leaf, which is 999.9 fine, trade at very similar prices despite the purity difference.

Where purity genuinely does change the price

Purity matters enormously for anything sold by gross weight rather than by declared gold content. Jewellery, scrap, dental gold and unmarked bars all fall into this category. If someone quotes you a price for a 20 gram chain, the first question is what karat it is. At 18 karat it holds 15 grams of gold; at 9 karat it holds 7.5 grams. The difference in value is exactly double.

Purity also matters for refining and resale. Refiners charge to separate gold from its alloy, so lower-purity material attracts a bigger deduction. This is why scrap buyers pay a smaller percentage of spot for 9 karat than for 22 karat.

Reading hallmarks and stamps

Investment bars are usually stamped with the refiner name, the weight, the metal and the fineness, and modern bars often carry a serial number matching an assay certificate. Coins carry a face value, a weight and frequently a fineness mark. Jewellery from the United Kingdom, Ireland and several other countries carries a formal hallmark from an assay office that certifies purity independently.

A missing or crude stamp is not proof of a fake, but it is a reason to be careful. Buy from established dealers, keep the assay card that came with a bar, and photograph both sides of anything unusual for your own records.

Recording purity in your portfolio

If you track your holdings, record purity alongside weight for every item. Without it, any valuation you calculate is a guess. BullionTally lets you set a karat from 24K down to 9K, or enter a custom fineness for unusual pieces, and it applies that automatically when valuing the item at live spot. That means a 22 karat sovereign, a 999.9 bar and an 18 karat ring can all sit in the same portfolio and still produce an accurate total.