You have no doubt read countless articles on the price of gold costing
"x dollars per ounce", own a gold ring or some other piece of gold
jewellery and/or wear or have bought/plan to buy a diamond ring but do you
really understand what 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? What's the difference between a .75 and a 1.0
carat diamond? Let me explain.
Definition of "Karat"
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]
|
|
24 karat
|
99+%
|
|
22 karat/917
|
91.6%
|
|
21 karat
|
87.5%
|
|
20 karat
|
83.3%
|
|
18 karat/750
|
75.0%
|
|
15 karat
|
62.5%
|
|
14 karat/583
|
58.5%
|
|
10 karat/417
|
41.7%
|
|
9 karat
|
37.5%
|
|
8 karat
|
33.3%
|
|
1 karat
|
4.2%
|
(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)
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 jewellery 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
minimum karat value for an item to be sold as gold jewellery 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.
Definition of "Carat"
The term used to describe the unit of weight of a gemstone,
including diamonds, where 1 carat = 200 milligrams or one-fifth of a
gram. Smaller diamonds are often expressed as points, not carats where
100 points = 1 carat (i.e. each point equals 0.01, or one-hundredth, of a
carat).
Origin of the Word "Carat"
The word "carat" is derived from the Greek "keration,"
meaning fruit of the "carob" tree. Because the seeds of the carob
were uniform in size, they became a unit of measure of fine gemstones. Since
an average carob seed weighs 200 milligrams, the weight of 1 carat was set at
200 milligrams.
"Carat" Abbreviations
The abbreviation ct is a shortened way to write carat, and refers
to the weight of a single diamond. The abbreviation ct TW means carat
total weight, and is used to express the total weight of multiple diamonds
used in a piece of jewellery.
"Carat" Weight vs. Size
Carat weight is used as a measure for other gemstones as well but
different gems of the same weight aren't necessarily the same size, because
some gemstones are more dense than others-meaning that they pack more weight
into a smaller space.
Two diamonds of equal carat weight can have very different costs based on
other factors (such as cut, color, and clarity). In understanding the
importance of carat weight it is important to know who you are dealing with.
As the carat size of a diamond increases, the diamond's price increases at
an increasing rate. Why? Because the larger the diamond, the more increasingly
rare it is. Fewer than one in one million mined rough stones are large enough
to produce a finished 1 carat diamond so, as carat weight increases, you will
typically pay more not only in total, but on a price-per-carat basis as well.
Conclusion
You now have a better understanding of the meanings of the words
"karat" and "carat" (I can only assume that you already
knew the meaning of the more familiar word "carrot"!) and the
difference between a "troy ounce' and just an "ounce" which
should ensure that you are never misled when reading about or considering the
purchase of any item in which such terms are (often loosely) used.
