Gold Purity

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For collectors and investors in gold bullion or in jewelry, the purity of gold is of the utmost importance. Because gold is too soft to be used in everyday items such as personal accessories without being alloyed with some other metal to help harden it, the purity of gold jewelry is usually measured by the fractional amount of gold found in the alloy. This measure of purity is known as carats, originally due to the practice of Arabic traders of weighing small measures (rough diamonds, small nuggets of gold) with carob seeds.^[1] This measure was later adopted by the Greeks, into what they called a keration, although its association with gold purity only came much later, when one keration became the equivalent of one twenty-fourths of a Roman solidus (a type of gold coin) by weight, hence the measure we now know today.

For those who are willing to invest in gold as a hedge security against the vagaries of economical stability or lack thereof, gold purity is of the utmost importance since no other type of commodity is immediately exchangeable for cash, nor is any other commodity just as readily salable as gold. Unfortunately, most of the gold that is found in the market today contains differing amounts of gold intermixed with equally varying amounts of base metals which makes it problematic for some investors. To go beyond this problem, officially issued gold of controlled and regulated purity and fineness is often sold by independent companies or by National Mint itself to interested investors and collectors; these are known as bullion.

Bullion coins and bullion ingots and bars often come it its pure state, which makes it highly valuable and readily exchangeable for all forms of currency that have a gold standard. Usually made of .9999% fine gold (equivalent to 24 carats), with some exceptions (i. e. crown gold) bullion make for excellent investments as they can be sold quite readily, and they are not prey to the vagaries of the market unlike bonds or investments in the stock exchange. While jewelry and impure collectible coins are also readily salable and convertible to cash, they do not have the same gravitas or buying power as a pure piece or chunk of fine gold. Because gold can easily be melted and is also readily transportable, it is a better investment than cash. Gold is also a universally accepted form of currency hence it can be traded anywhere, and since it is a very dense metal, investing in gold equates to higher exchange rates and premiums, provided that the gold is pure, and the current asking price is high.

When investing in gold, many veteran investors always live by the rule of buying during low tide and selling during high tide .^[2] This means that they will accumulate as much gold bullion as they can while the selling price is at an affordable level, and will only liquidate part of their bullion investments when the market demand for gold is at its peak. Not only is this tactic less risky, it also generates more profits for less cost. Because gold purity is of the utmost importance to investors, one who wishes to invest in bullion must always purchase only from reliable dealers or official issuers of bullion ingots or coins to guarantee the utmost in gold purity.

Gold Purity - References:

[1] http://www.etymonline.com/index.php?allowed_in_frame=0&search=carat&searchmode=none
[2] http://abcnews.go.com/Business/10-tips-selling-gold-cash/story?id=14356892

Note - this site provides general information about gold, silver, coins and bullion. None of the contents of this web site should be seen as financial or investment advice.