Gold Investing - Karatage System

Karatage is a system of specifying the purity (or fineness) of gold as a fraction of 24 parts. For example, 18 karat gold is 18 parts gold out of 24 parts or 75% gold. Other common karat readings are 10 karats (41.66 % gold), 14 karats (58.33 % gold) and 22 karats (91.67 % gold).

American manufacturers of gold products are required to stamp each gold item with their mark or insignia and the gold content "quality mark" usually expressed in karats. A dirty little secret is the gold purity can be off as much as one-half karat and still be legal. That is, a gold item marked as 18k can actually be 17 1/2k and still meet the letter of the law.

When you sell your scrap gold to a gold company accepting such items they, as well as the refiner they ship the items to, are aware of this leeway in the law. It is also assumed that many if not most American manufacturers of gold products take advantage of this leeway and your buyer will set their buy price accordingly.

If you have traded in your scrap gold for cash and what you received seemed a little low (based on the gold purity of the items you sold), this may be one reason why.

Gold and The Karatage System

I have discussed the karatage system in my article on Gold Weights & Measures but wanted to expand on it a bit. With all the scrap gold being turned in at various local and national gold dealers as well as the popular home gold parties, this is good information for you to know.

Karatage is a system used to express the purity or fineness of gold in 24 parts. Pure gold is 24 karats or 24k. Anything less is a mixture of gold and some other metal(s). Below are various karatage categories with their gold fineness and percentage of gold content:

24 karat = .9999 fineness = 99.99% gold;
23.6 karat = .9830 fineness = 98.3% gold;
22 karat = .9167 fineness = 91.67% gold;
21.6 karat = .9000 fineness = 90.0% gold;
18 karat = .7500 fineness = 75.0% gold;
14 karat = .5833 fineness = 58.3% gold;
12 karat = .5000 fineness = 50.0% gold;
10 karat = .4166 fineness = 41.66% gold;
8 karat = .3333 fineness = 33.33% gold.

Happy investing.