All About Gold Carats

As any buyer of gold jewelry knows, the value of any piece of gold is largely determined by its purity. The standard measure of the purity of gold alloys is known as the carat.

You may be surprised to know that your gold jewelry and most coins aren’t 100 percent gold. In order to make gold durable enough to be used in jewelry or coinage it must be alloyed with other metals. The more the gold is alloyed, the less pure it is, however. The more carats a gold piece has, the higher its worth.

Gold is typically available in these varieties of carats:

24 carat gold — 24k gold is 99.9 percent pure. You won’t hardly ever find gold of this caratage used in jewelry, but it is used in coinage.

22 carat gold — 22k gold is 91.7 percent or more pure gold. This gold tends to be too soft to use for most jewelry, as it bends out of shape easily. However, you may see some 22k gold jewelry in museums as relics of the age before metalworking became more developed.

18 carat gold — 18k gold is about 75 percent pure. It is used in more high-end gold jewelry pieces and has a deep and rich color.

14 carat gold — 14k gold is the standard amount of carats used in jewelry. It’s firm enough to retain polish and detail for decades or longer.

12 carat gold — 12k gold is 50 percent pure. It has a slightly less attractive color than 14 carat gold.

10 carat gold — 10k gold is 41.7 percent pure. This is the baseline caratage that can be considered gold in the U.S. Any metal with a lower caratage cannot legally be called gold.

Gold carats and investors

With regard to gold’s use as an investment tool, knowing the caratage of any gold coins, jewelry or bullion they may have bought is important for investors who wish to know the value their property.

When calculating the gold value of coins, jewelry or bullion, investors should consider the weight of the piece, then determine the gold content of the piece by the caratage, and then multiply that figure by the current price per troy ounce. For example, if you had a one ounce gold piece that was 12 carats, the gold content is 50 percent, or .5. If the value of gold at that time is $1,211 per ounce, then your gold piece is worth about $605. The jewelry or coin may be worth more based on rarity and historical value.

In the U.S. gold is required to be stamped with the name of its manufacturer and the caratage of the piece. The U.S. Federal Trade Commission strictly regulates carating, and there are severe penalties for under-carating gold.