Gold bullion coins never consist 100% of pure gold. The reason for this, is because gold alone is too soft to use in jewellery or to hold a form. It is therefore necessary to alloy gold with other metals such as copper, silver, nickel, zinc, etc. to make it harder and more durable. This combination of gold with other metals is called “gold alloying” and the final compound is called “gold alloy” if it contains more than 50% gold.

The Purity of Gold

The modern way of denoting the purity of gold, platinum and silver alloys are through a system called Millesimal fineness. This system denotes fineness which is a measure of the weight of pure gold per 1000 parts. The millesimal fineness system has not replaced the older carat system yet, but steps are being taken in that direction. The main reason for this, is because the millesimal fineness system is more accurate in denoting the purity of gold alloy.

For example, a gold alloy that’s denoted as “750,” using one of the percentage hallmark stamps used in many European countries, contains 75% gold. This is equal to the “18K” used in the United States, which is an extension of the older carat system of denoting the purity of gold by fractions of 24. “18K” is therefore in reference to 18 carat or karat in North American spelling. “18K” or “18 carat” means that there are 18 parts pure gold and 6 parts other metal in the relevant gold alloy.

The purest form of gold,  according to the millesimal fineness system, is denoted as “999.99”  and as “24K” or “24 carat” according to the older carat system.

The most common millesimal finenesses used to denote the fineness or overall purity of gold alloys: (According to Wikipedia)

  • 999.99 (The purest type of gold in the market) 
  • 999.9 
  • 999 (Fine gold equivalent to 24 carat, also known as three nines fine) 
  • 995 
  • 990 also known as two nines fine 
  • 916 (equivalent to 22 carat) 
  • 833 (equivalent to 20 carat) 
  • 750 (equivalent to 18 carat) 
  • 625 (equivalent to 15 carat) 
  • 585 (equivalent to 14 carat) 
  • 417 (equivalent to 10 carat) 
  • 375 (equivalent to 9 carat) 
  • 333 (equivalent to 8 carat; minimum standard for gold in Germany after 1884). 

The most common carats used to denote the fineness or overall purity of gold alloys with corresponding millesimal finenesses:

  • 24 karat = Millesimal fineness 999 
  • 22 karat = Millesimal fineness 916 
  • 20 karat = Millesimal fineness 833 
  • 18 karat = Millesimal fineness 750 
  • 15 karat = Millesimal fineness 625 
  • 14 karat = Millesimal fineness 585 
  • 10 karat = Millesimal fineness 417 
  • 9 karat = Millesimal fineness 375 

The overall purity of gold alloy is important but…

Gold bullion prices are based on how much gold is actually inside a gold coin or gold bar in terms of the weight of the gold. Fineness always refers to the overall purity of gold and not to the weight of the gold within a gold coin or gold bar. 

For example, a gold bullion coin (gold coin) which has a millesimal fineness of “999” and weighs 1/10 troy ounce (t oz / ozt)  is of less value than a gold coin which has a millesimal fineness of “750” and weighs 1 troy ounce (t oz / ozt).

In other words, the overall purity of a gold alloy is important, but the weight of the gold in the alloy is even more important.

The Weight of Gold

Troy ounces are used to weight gold. The troy weighting system was originally used in Troyes in France to measure the weight of precious metals such as gold, silver, et cetera. The troy ounce (t oz / ozt), is however the only measure of the troy weighting system that is still used today.

1 troy ounce (t oz / ozt) = 31.1034768 grams

1 troy ounce (t oz / ozt) = 0.0311034768 kilograms

1 troy ounce (t oz / ozt) = 480 grains

1 grain = 0.06479891 grams

A common error people make are to confuse a troy ounce with a standard (avoirdupois) ounce…

A troy ounce is about 10% heavier than a standard (avoirdupois) ounce. When the price of gold is advertised or said to be $1053 per fine ounce in the market place, the ounce is in reference to a troy ounce which is equal to 1.09714286 standard (avoirdupois) ounces.

one troy ounce (t oz / ozt) = 1.09714286 ounces

0.911458333 troy ounce (t oz / ozt) = one ounce (oz)

Gold bullion coins such as Krugerrands are normally available in 1 t oz / ozt, ½ t oz / ozt, ¼ t oz / ozt and 1/10 t oz / ozt coins in terms of the weight of the gold content.

Historical measurement of gold…

  • fine ounce is a troy ounce of 99.5% (“.995”) pure gold, 
  • standard ounce is a troy ounce of 22 carat gold, 91.66% pure (11 “fine ounces” plus one ounce of alloy material), 
  • in modern day, an ounce of gold (1 troy ounce) is referred as a 99.99% pure gold piece or gold grains (gold shot). [Wikipedia] 

In other words, 1 ounce of gold (1 t oz / 1 ozt) today is 99.99% pure gold.

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