Understanding gold purity

Oct 6, 2020

The Perth Mint Refinery- hands holding gold granules

Dating back to the beginning of time, gold’s value has always been inextricably entwined with its purity.

While the system of measuring gold’s purity was determined thousands of years ago, long before it became a monetary asset, these units continue to dictate the metal’s value today.

It therefore makes sense that understanding how and why gold is valued remains just as important to the modern investor as it did to the ancient trader.

Below we explore what purity means - and why it matters.

Ancient origins

Gold’s durability, density and glow made it a natural choice as a store of wealth long before it was used as money.

Before the advent of coins, which were an ingenious innovation around 700BCE (a good 2,000 years after gold was first launched on its monetary career), every transaction involved the somewhat tedious task of testing for purity and putting the gold on a scale to determine its exact weight.

So, from the very beginning, a widely accepted method for gauging the purity of gold was essential. It therefore acquired its own measuring system for these purposes, with versions now used on other precious metals and gemstones.

Did you say carob?

You may be familiar with the word carat as a unit of measurement in relation to diamonds and other precious gems. However we also define the purity of a piece of gold in terms of its carats.

Carat - deriving from Arabic qīrāṭ, meaning ‘bean pod’, keration in Greek and carato in Italian – was originally a unit of measurement rather than purity.

Carats are the seeds of the leguminous carob tree, the average pod of which weighs one-fifth of a gram. Hence these small seeds from the flowering plant were the conventional standard weight for eons - and remain so for gold.

One carat (spelt karat in the US) is equal to 1/24th part of pure gold in an alloy.

In other words:

  • 24-carat gold is 99.99% pure, or 24/24 carats.
  • 22-carat gold, expressed in a percentage, is 91.7% pure.
  • 18-carat is made of 18 parts gold and six parts of some other metal, such as copper or silver, meaning it is more durable and resistant to scratches than pure gold.

24-carat gold – or 99.99% pure gold – is the highest and purest grade of gold. It is soft, malleable and highly resistant to rust and tarnish. Therefore, its most common usage is in gold bars and coins for investment and wealth storage.

22-carat gold is typically less expensive than 24-carat gold. It is more durable than its pure counterpart, making it ideal historically for the production of gold sovereigns. It is also found in plain jewellery, however 18-carat (75% pure gold) is also suitable for fine jewellery and of course 14-carat and below are typical gold nominations for more common – and less expensive – adornments.

As per all those thousands of years ago, the more carats and therefore the purer the gold, the more valuable.

an inforgraphic discussing gold purity

Troy ounces

Eventually the carat was replaced as the standard measurement by the grain. The troy ounce, which comes from the French town of Troy where the measure was first put into use, weighs 480 grains.

12 troy ounces equal one pound, which is the same as one sixteen-ounce pound avoirdupois (avoirdupois is the conventional measurement system of weights which uses pounds and ounces).

Therefore troy ounces are heavier than the ounces we are used to employing. The modern convention is to express the weight of gold in grains but the price in troy ounces.

Purity you can trust

Armed with the above knowledge, you can see why it’s important to understand the purity – and therefore the quality – of your assets, especially when building your savings.

As a certified gold refiner with accreditations from all five of the world’s major gold exchanges, Perth Mint customers can have the utmost confidence in the stated weight, purity and integrity of our products.

With a reputation built across more than 120 years as an industry leader, we are the supplier of choice for thousands of investors around the world who benefit from the trusted purity of our suite of products.

If you’re ready to save in gold, we offer easy access to the precious metal in a variety of forms.

An extensive range of physical gold bullion gold bars and coins are available for purchase from our website, with the weight and purity of each guaranteed.

These span from 1oz to 1,000oz (1 kilo) gold bars and coins, all 99.99% pure.

Our Depository Online (DOL) service provides online access 24/7 to live gold prices for easy trade and several types of storage options. DOL can easily adapt to a savings plan with the option of scheduling an investment of as little as AUD 50 each month.

For those just starting out on their wealth-creation journey, our GoldPass app puts your gold savings in the palm of your hand. With instant access, it gives you the ability to buy digital gold at the touch of a button and with no minimum investment.

If you’d rather admire gold in the form of jewellery, our luxury boutique stocks exquisite 18-carat gold pieces perfectly complemented by the rarest of precious gems.


The power of gold: The history of an obsession, Bernstein, Peter L.
On the origin of the carat as the unit of weight for gemstones, Zhengzhang, T. Chin. J. of Geochem.10, 288–293 (1991).


Past performance does not guarantee future results. The information in this article and the links provided are for general information only and should not be taken as constituting professional advice from The Perth Mint. The Perth Mint is not a financial adviser. You should consider seeking independent financial advice to check how the information in this article relates to your unique circumstances. All data, including prices, quotes, valuations and statistics included have been obtained from sources The Perth Mint deems to be reliable, but we do not guarantee their accuracy or completeness. The Perth Mint is not liable for any loss caused, whether due to negligence or otherwise, arising from the use of, or reliance on, the information provided directly or indirectly, by use of this article.