Add price alert

The ABCs of Gold The Most Common Terms Used When Talking About Gold

Published by Karl Martin Karus in category Articles on 13.12.2022
Gold price (XAU-SEK)
24334,40 SEK/oz
  
+ 17,30 SEK
Silver price (XAG-SEK)
308,58 SEK/oz
  
- 0,37 SEK

What does “pure gold” mean?

When buying gold jewelry, you probably have heard the terms of gold carats and the purity of gold. Gold purity means nothing more than the content of pure gold in the jewelry item, which is commonly measured in carats. The number of karats indicates how many parts of pure gold make up the jewelry. The lower the number of carats, the more other metals have been mixed into the alloy, and vice versa.

The highest possible number of carats in gold is 24k – this symbolizes “pure” gold.

A quick calculation shows that 12-carat gold contains 50% gold, with the remaining half made up of other metals that are purposefully added to the alloy to achieve the properties required for the respective product. Copper, silver, nickel, palladium, and zinc are the most common impurities in gold alloys.

A gold sample also expresses purity – you have surely noticed three-digit numbers on gold objects before. Gold grade 999 indicates that the given alloy contains 99.9% gold – this is the highest grade of gold or the purest possible gold.

The purest gold product in the World has a sample of 99.999% – The Royal Canadian Mint gold coin, which makes it a great investment product.

Understanding Gold Purity

Number of Karats Parts of Gold % of purity Millesimal Fineness
9k 9/24 37.5 375
10k 10/24 41.7 416/417
12k 12/24 50 500
14k 14/24 58.3 583/585
18k 18/24 75 750
22k 22/24 91.7 916/917
24k 24/24 99.9 999

 

The 585 grade, widespread in gold jewelry, indicates that the product contains 58.5% pure gold and 41.5% other metals to make the jewelry more durable.

Why can’t the test be 100% for pure gold? It is almost impossible to remove 100% of all kinds of additives that the gold may come into contact with under the conditions of smelters. In addition, a fraction of other additives is necessary to give the alloy the desired properties, such as strength.

Such pure gold is too soft for valuables. Jewelry and circulation coins produced from such gold would not hold their shape. This is why we don’t see gold grade 999, for example, in jewelry or historical circulation coins.

What is investment gold?

Gold is an asset investment for price appreciation and/or preserving wealth.

You can invest in gold in both physical and virtual forms. The virtual form is commonly known as buying gold or mining-related ETFs and indices.

Virtual Gold, Digital Gold, Physical Gold

  • Virtual gold or paper gold. For example, exchange-traded gold fund units (ETFs), gold mine shares, or other instruments that are not physically tangible. That means gold can be traded on the Internet like any other asset class without leaving home.
    That term is often used in the trading community, where buying and selling happen frequently. Traders buy or sell gold financial instruments such as ETFs and CFDs. Trades only happen virtually, gold ownership is not physically exchanged, and you do not necessarily own gold in any way.
  • Digital Gold can also be physical. Bullion dealing companies sell physical gold to a customer but store it themselves. The customer pays a monthly or yearly fee to the bullion dealer for safekeeping and storing customers’ physical gold products.
  • Physical investment gold is actual gold coins and gold bars produced by gold refineries. Physical investment gold is usually very high in purity. It has refinery or mint certification and can be an investment outside the digital system. You can invest VAT-free in physical gold with Tavex. See our product page ->

What is scrap gold?

“Scrap gold” refers to any gold that is no longer valuable in its original manufactured form, such as broken jewelry or industrial by-products. Scrap gold is frequently sent to a refinery to be melted down and recycled into something else. In other words, any gold that is intended to be reprocessed and/or repurposed could be regarded as scrap gold.

What is spread, and what is spot?

Spread

In finance, a spread can have several meanings. Usually, the spread is defined as the difference between two prices, rates, or yields. According to one of the most common definitions, the spread is the difference between the bid and ask prices of a security or asset, such as a stock, bond, or commodity. This is referred to as a bid-ask spread.

Spot

The spot price is the current market price of a security, currency, or commodity available for immediate purchase or sale. In other words, it is the current price at which sellers and buyers value an asset.

Gold price (XAU-SEK)
24334,40 SEK/oz
  
+ 17,30 SEK
Silver price (XAG-SEK)
308,58 SEK/oz
  
- 0,37 SEK

You might also like to read