Carat (Gold Purity)

Carat to fineness conversion

To convert a carat number to purity, divide it by 24. In Australia you will see it stamped as "18ct" or "9ct" on jewellery, sometimes with the matching fineness number. Bullion is normally stamped in fineness instead.

Worked example: a 20 g 18 carat chain holds 20 x 0.75 = 15 g of gold. A 20 g 9 carat chain holds only 7.5 g, which is less than a quarter of a troy ounce. The rest is silver, copper or zinc, which shapes the colour (yellow, rose or white gold) and the hardness.

Jewellery is not bullion

Carat gold jewellery sells for well above its metal value because you pay for design, labour and retail margin. When you sell it to a gold buyer, you are paid for the fine gold only, minus a refining margin. Gold jewellery also carries 10% GST when sold new in Australia, because the GST Act treats only investment-form gold of at least 99.5% purity as precious metal. Bullion of 24 carat in coin or bar form is sold without GST; see GST on gold.

22 carat sits in the middle. The Krugerrand is a bullion coin in every practical sense, priced close to spot, yet at 91.67% it misses the GST purity line. Compare the final price of a 1 oz Krugerrand with a 24 carat 1 oz Maple Leaf before you assume the cheaper headline is the cheaper coin.

Scrap value of carat gold

If you want to estimate what an old 9 or 18 carat piece is worth as metal, multiply its weight in grams by its purity and by the AUD gold price per gram. Buyers then deduct their margin, which is a form of bid-ask spread. Weigh items without stones, since diamonds and gems add weight but no gold.

Note the spelling: Australia and the UK use "carat" for gold purity; the US spells it "karat" to separate it from the diamond carat, which is a weight of 0.2 g.