Every year in the run-up to Christmas, one particular colour dominates cities’ shopping areas: gold. The golden glow also washes over private homes in the festive season, with many a Christmas tree’s ornaments shimmering in gilded hues, as well as its tinsel and, of course, the trusty gold angel as the crowning glory. Gold is equally present under the tree – nicely wrapped – in the form of necklaces, bangles, earrings, cufflinks or wristwatches. These popular gifts are usually made of 14 carat gold, which corresponds to the purity grade of 585/1000, meaning that 58.5 per cent of the jewellery consists of pure gold. The most common degrees of gold purity, or millesimal fineness, start at 8 carats – so-called 333 gold – for less valuable gold jewellery and range from 9, 14, 18, 21 and 23.2 up to 24 carats – the premium class.

Why “carat”?

The term “carat” stems from the French “le carat”, originating from the Latin term “caratus”, which in turn is a loanword from Arabic, borrowed from the ancient Greek word “keration”, used to describe the fruit of the carob tree. At the time, the seeds of this tree were often used to measure weight because of their uniform size. Due to the possibility of determining very small weights relatively reliably, the unit of measurement was already recommended in ancient times only for very precious raw materials and goods. As the “metric carat”, this unit of measurement was widely recognised as a sound way to determine the mass of precious stones and has since been used for this purpose.

24 carat fine gold: unsuitable for jewellery making

24 carat is the ultimate in gold purity. At 999.9/1000, however, it is a degree of purity that is rather impractical for everyday wear. On the one hand, 24 carat gold is imperishable, meaning that it does not corrode or age. On the other hand, however, it is not only extremely heavy, but also relatively soft and thus easily deformable, even by bare hands. Gold alloys with a lower degree of purity have the advantage of a lower price and weight. They are also harder and more resistant.

Today, modern investment coins such as Maple Leaf, Philharmonic or China Panda and gold bars from renowned manufacturers such as Umicore, Heraeus or Degussa are mainly made of 24-carat gold. The value of gold bars is determined exclusively by their fine gold content, while the material value of bullion coins usually significantly exceeds their nominal value.

Different countries, different degrees of fineness

Thai gold is usually 23.2 carats, which corresponds to a fineness of 965/1000. This is mainly based on tradition. Thai gold has been around for several thousand years: very early on, a lot of gold was mined in Siam (“Gold” in English), the official name of Thailand until 1939. In Asia, gold was appreciated not only for its beauty, but also as a store of value. The tradition lives on across the Orient, where 21-carat gold, corresponding to a fineness of 875, remains a popular bridal gift in the form of jewellery. The simple reason: even at weddings, gold jewellery is primarily seen as a store of value, a safeguard for the bride in case of separation. In addition to the common 21-carat gold jewellery, variants with 21.6 and 22 carats, corresponding to a fineness of 875/1000 and 900/1000 respectively, are also popular for bridal gifts.

Buying or giving particularly valuable gold jewellery is, of course, also an expression of affection in western regions. In addition to the more widely available 14-carat variety, particularly high-quality gold jewellery has a fineness of 750/1000, corresponding to 18 carats.

The sale of old gold can be worthwhile

Scrap gold is the term used for gold jewellery or old commercial gold coins no longer used as investment gold coins. Trade gold coins such as kronor, guilders or gold coins of the German Empire were often made of 21.6-carat gold. As with jewellery, the purity grades of gold coins vary. A visit to the jewellers’ with old jewellery or an old gold coin collection can therefore prove lucrative. It is, however, advisable to check beforehand whether the collector’s value of the gold coins exceeds the material value itself.

Arnulf Hinkel
Financial journalist