Karat is the term that is used internationally to indicate the purity of the gold. The karat rate is directly proportional to the purity of the gold. As the karat increases, so does the purity of the gold. The difference between a 24 karat, 22 karat and 18 karat golds are explained below. The 24 karat gold is the purest form of gold that is available. Because of its purity, rather than using it to make jewelry, it is used for investment purposes. The 24 karat gold exists in the form of gold coins or gold bars. The 24 karat gold is followed by the 22 karat gold which is used to make jewelry. The 22 karat gold is a mixture of gold with alloys such as zinc, nickel, or silver. These alloys make the gold harder and fit to be fashioned into jewelry. The purity of the 22 karat gold is 91.67% pure. The 18 karat gold is the cheapest gold that exists. It is a mixture of 75% gold and 25% alloys.
Gold has always been one of the most significant investment options for Indians. The high liquidity of gold and its consistent value makes it a popular option for investment purposes. It also acts as a hedge against fluctuations in the market. Gold can either be pledged in the form of a gold loan or it can be sold to meet urgent financial deficits. It pays to be aware of the value of gold to prevent unscrupulous activities by the lenders or jewelers. It is not very complicated to calculate the value of the gold. The weight and the purity of the gold will have to be tested at an assaying laboratory. There are two methods to calculate the purity of the gold. It can be denoted in percentage or in karat.
Gold holds an impeccable value in terms of quantifying one’s wealth as well as for investment. Thus, judging the quality and purity of gold is of utmost importance, both for buyers and for traders.
Primarily, the gold’s purity is determined through the Karat system that measures the same on a scale from 0 to 24. For instance, a 24 karats gold jewellery contains 100% gold. On the other hand, in a 14K gold jewellery, the percentage of gold is 58.33%, and the rest is other metal or alloy.
The gold purity can be measured both by percentage and parts per thousand. However, to convert the Karat into a percentage, one needs to divide the Karat number by 24 and then multiply it by 100.
Another easy way to determine gold’s purity is by checking the hallmark stamp on gold jewellery. This hallmark includes the authorised logo, date of manufacturing, carat weight or fineness of the gold in question. In several countries, including India, it is mandatory to sell gold jewellery with hallmark stamp.
Lastly, the traders generally use an electronic gold tester to measure the quality and purity of gold. It shows the result accurately within seconds.
If there was another indicator to measure wealth in the world, barring currency, it would be gold. It is one of the nine noble metals, but gold’s value in the economy surpasses that of its counterparts. But the exploration and extraction of gold is a slow-moving, laborious process.
However, this metal still has a readily available market across the globe, which increases its liquidity, thereby making it an ideal asset. Owners of gold articles have the freedom to convert them into cash with ease.
Moreover, gold is a luxury good, which means that people purchase it in larger quantities when their income rises. Therefore, this yellow metal generally exhibits a steady increase due to high demand and inadequate supply, especially in a country like India. Most free-market economies of the world use gold reserves to hedge against inflation. As a result, this metal possesses an intrinsic value in the global economy as well.
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