How to Calculate Gold Purity and Value
The value of gold is directly tied to its purity, which is measured in karats. Understanding this system is the first step toward accurately valuing your gold items, whether for selling or insurance purposes.
What Does 'Karat' Mean?
24-karat (24K) gold is considered pure gold, but it is too soft for most jewelry. Therefore, it is often mixed (alloyed) with other metals like copper, silver, or zinc to increase its durability. The karat number tells you how much pure gold is in the mix out of 24 parts.
- 22K Gold: 22 parts gold, 2 parts other metals (91.67% pure).
- 18K Gold: 18 parts gold, 6 parts other metals (75% pure).
- 14K Gold: 14 parts gold, 10 parts other metals (58.3% pure).
Calculating the Value
Knowing how to assess purity allows you to determine the 'melt value' of your gold. This is calculated based on the current market price of pure gold and the weight of your item. This knowledge is invaluable whether you are buying, selling, or simply inventorying your assets.