Mark Phillips - February 12th, 2022
What Is a Gold Karat and Why Is It Important? A Guide
Everyone knows gold is valuable. We've seen a steady increase in the price of gold for years! But, when looking to invest in precious metal, what is the best kind of gold?
We most often see gold described in a 'karat' when referring to jewelry. The precious metal is categorized by a unit of purity. The higher the karat, the purer the gold is.
Read on to learn more about gold karat and what the levels of purity mean for your metal investing.
What Is a Gold Karat?
Karat is a unit to measure the purity of gold. Outside North America, karat is often spelled 'carat' but this is not the same as the measurement to weigh precious gemstones. One gold karat is 1/24 of the whole, or 4.1667 percent gold.
24 karat gold is pure gold. Pure gold is quite soft and not always best for pieces that require durability, like a wedding ring. The minimum karat amount for a piece of gold jewelry is regulated by individual countries' laws. In the United States, 10 karat is the lowest amount acceptable to be labeled as gold.
Mixing other metals with 24 karat gold gives it structure and will also change the color. Jewelers create white gold by alloying 24 karat gold with silver or palladium. Rose gold is formed by adding copper.
Other metals used as alloys include nickel, zinc, and platinum. For people with common metal allergies to nickel and zinc, choosing a higher purity of the gold will prevent allergic reactions to their jewelry.
A happy customer e-mailed us this picture of a Gold Bar he picked up from the Fire Sale page. Circa 2017.
10 karat gold is commonly used for jewelry. It consists of 41.7 percent gold and the rest is an alloying metal. Using 10 karat gold is common for durable pieces that benefit from a lower price point, like earrings. Wedding rings, engagement rings, or luxury items do not usually use 10 karat gold.
This gold is the most inexpensive choice due to it having the lowest concentration of pure gold. It makes it a popular choice for people looking to add pieces to their precious metals jewelry collection.
10 karat gold is also extremely durable because of the high content of alloy metals. It makes a great choice for a watch or a ring because the material is much harder to scratch or dent than higher levels of gold.
Pieces made from 10K present with a lighter yellow. The yellow is often so faint, it appears more like white gold.
The next purity level of gold is 14 karats. This is commonly used for more precious forms of jewelry due to its durability and richer color than 10K. 14 karat gold is 58.3 percent pure gold and 41.7 percent other metals.
Although 14 karat pieces are durable, they can still experience scratches and dents. These pieces hold up well and that is why most wedding bands are made from this material.
14 karat gold maintains the lovely, rich yellow color that gold is famous for. It is still relatively inexpensive compared to the higher levels of purity available.
An example of a quadruple 9, fine gold round. Extremely high purity. Photo credit: Investor Crate Facility WEST.
This is the most common option of nearly pure gold available for jewelry.18 karat gold is 75 percent gold and only 25 percent alloying metals. It is a luxury metal that comes with a higher price tag due to its large gold content.
18 karat gold provides a rich and deep yellow color. This makes it ideal for fancy earrings and necklaces where the piece is a statement. Because of the high percentage of gold in 18 karat, it is not suited best for daily wear. The gold will easily scratch and require polishing, which wears down the jewelry faster.
It is tempting to think that pure gold would make the best jewelry option. While gold bullion bars are made from 24K gold, pure gold is not typically used to make jewelry. It is far too soft.
Jewelry requires durability and 24 karat gold doesn't provide that. It can bend out of shape easily, scratch, and warp. Pure gold is also very intense in color, which is unappealing for consumers used to the look of 14K.
For people looking into acquiring gold for investing, pure gold is the right choice. But, not in the form of jewelry. Look for gold coins or solid bars from a reputable mint.
Investing in Precious Gold
Gold is desirable and continues to increase in value. The level of purity increases the resale price of your gold pieces. So, if you are looking to purchase gold as an investment, it is best to aim for the highest karat you can afford.
Gold is a sure bet for a safe investment. Gold is valuable all over the world and purchasing 24 karat gold will continue to hold its value. Gold is used in medical devices, electronics, and of course, fine jewelry.
If looking to purchase jewelry for wear, 10K to 18K gold is the best option, depending on the piece. All gold jewelry is stamped with the purity it contains. Look for the 'K' or 'C' stamped on the back of your piece, or send it to a jeweler to be appraised.
The right karat for you will depend on how often you plan to wear your pieces, the color you desire, and the amount you are willing to pay.
But, when you are planning to buy gold for investment purposes, you should aim towards pure gold bars and coins. Coins are a great place to start your precious metal collection. They often have introductory prices compared to the large investment needed for bullion bars.
Add to Your Collection
Now that you're aware of what a gold karat is and how it measures the purity of gold, you are ready to start adding to your personal collection. Most gold investors look to add to their collection through coins and solid bars from reputable mints.
Investor Crate offers a unique way for people to secure gold for their personal investments. It takes the worry out of investing through a unique subscription service. There is no obligation, contract, or cancellation fees.
Grow your gold collection with a personalized and monthly delivery to your home. Contact us today to start your precious metal deliveries!
This is in no way to be considered investment advice. Past performance is no guarantee of future results. Asset allocation and diversification do not ensure a profit or guarantee against a loss. Keep in mind that any form of investing involves risk and you should always consult with your financial advisor before making any financial decisions. Investor Crate, LLC., it's subsidiaries and staff will never advise you on any asset as our aim is to provide a fun and affordable service should you decide to purchase Precious Metals.
Keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money.