munKNEE.com Your Key to Making Money
What’s the difference between 1 troy ounce of gold and 1 (regular) ounce? What’s the difference between 18 and 10
karat gold? What’s the difference between a .75 and 1.0 carat diamond? Let me explain.
By Lorimer Wilson editor of www.munKNEE.com
The term “karat” is used to describe the unit of measurement for the proportion of gold (i.e. % purity of the gold content) in a piece of jewelry, coin, ingot or bar.
Gold will often be mixed with “filler metals” such as silver, palladium, platinum, nickel and even copper to combat the softness of pure 24 karat.
- Gold which contains a degree of silver, platinum or palladium is referred to as “white gold” and will classify with a higher amount of karats while the presence of nickel leads to a slightly lower designation of karats.
- Copper is used to give gold durability and give it a golden rosy tone.
Below is a table outlining the karat designations at various gold purity levels plus the extent of “fineness” as is used in some countries such as Italy.
| Karat/Fineness | Gold Content [Purity] |
| 24 karat | 99+% |
| 22 karat/917 | 91.6% |
| 21 karat | 87.5% |
| 20 karat | 83.3% |
| 18 karat/750 | 75.0% |
| 15 karat | 62.5% |
| 14 karat/583 | 58.5% |
| 10 karat/417 | 41.7% |
| 9 karat | 37.5% |
| 8 karat | 33.3% |
| 1 karat | 4.2% |
In some countries “karat” and “carat” are used almost interchangeably although, strictly speaking, the words’ correct meanings are defined as:
- karat: the % purity of precious metal content
- carat: the weight of a gemstone
100% pure gold is defined as having a purity of 24 karats so if something is 24 karat gold then it’s made of gold and nothing else – regardless of size…
Gold is a relatively soft metal and high-karat gold tends to be easily damaged and, as such, a 24 karat item is usually reserved for display or ceremonial use as the picture of me with “my” 100kg. Canadian Maple Leaf 99.99999% pure gold coin which is now worth in excess of $6,100,000 USD! (100kg. x 32.1507466 troy oz. x $1,900/ozt. USD)
- munKNEE.com Editor-in-Chief Lorimer Wilson with the world’s first 100-kg, 99.99999 pure gold bullion coin with a $1 million face value. It was produced by The Royal Canadian Mint.
All jewelry is required by law to be stamped so consumers will know the quality of gold used. Jewelry made in North America is typically marked with the karat grade (10K, 14K, etc.), and jewelry made in Italy is typically marked with the “fineness” such as (417, 583, etc.). Most retail gold items have a karat rating in the range 9 to 18. In the U.S. the minimum karat value for an item to be sold as gold jewelry is 10. In the UK 9 karat is more common.
The number 24 may have originally been chosen to represent pure gold because it divides evenly by 2, 3, 4, 6, 8 and 12. Thus it’s easy to talk about a gold item being half pure (12 kt), 2/3 pure (16kt) etc. 9 karat would thus be 3/8 gold, 18 karat would be 6/8 (i.e. 3/4).
Definition of a “Troy” Ounce
A troy ounce (ozt) is a unit of imperial measure most commonly used to gauge the weight and therefore the price of precious metals.
One troy ounce is equivalent to 1.09714 avoirdupois (our conventional every day measurement) ounces i.e. 9.714% greater in weight and 1 kg. consists of 32.1507466 troy oz.
Please keep the distinction between ounces and troy ounces in mind when buying small quantities of gold and/or silver.
“Troy Ounce” Abbreviation
The abbreviation “ozt” is a shortened way to write “troy ounce”.
Definition of “Carat”
The term “carat’ is used to describe the unit of weight of a gemstone, 
including diamonds, where 1 carat = 200 milligrams or 1/5 of a gram.
Smaller diamonds are often expressed as points, not carats, where 100 points = 1 carat (i.e. each point equals 0.01, or 1/100, of a carat).
Origin of the Word “Carat”
The word “carat” is derived from the Greek “keration,” meaning fruit of the “carob” tree. Because the seeds of the carob were uniform in size, they became a unit of measure of fine gemstones. Since an average carob seed weighs 200 milligrams, the weight of 1 carat was set at 200 milligrams.
Carat Abbreviations
The abbreviation “ct” is a shortened way to write “carat”, and refers to the weight of a single diamond. The abbreviation “ct TW” means “carat total weight”, and is used to express the total weight of multiple diamonds used in a piece of jewelry.
Carat Weight vs. Size
Carat weight is used as a measure for gemstones other than diamonds as well, but different gems of the same weight aren’t necessarily the same size, because some gemstones are more dense than others–meaning that they pack more weight into a smaller space.
As the carat weight of a diamond increases, the diamond’s price increases at an increasing rate. Why? Because the larger the diamond, the more increasingly rare it is. Fewer than one in one million mined rough stones are large enough to produce a finished 1 carat diamond so, as carat weight increases, you will typically pay more not only in total, but on a price-per-carat basis as well.
Conclusion
Never again will you be misled when reading about or considering the purchase of any item in which the terms karat, carat or troy ounce are – often loosely – used.