What is 24 karat gold? Know difference between 999 vs 995 fineness gold

Gold purity: When purchasing gold, especially for investment or jewellery purposes, understanding the different levels of gold purity is important. You might have come across terms like 24-karat gold and fineness numbers like 999 or 995. Here's what they mean and how they relate to the purity of gold.

According to ET, if you're looking to buy the purest gold, 24-karat gold is the best choice. You can get it as coins or bars (also known as bullion). But these coins and bars are often labelled with either "999" or "995" fineness, which can be confusing. This is because there are two ways to measure gold's purity.

What is 24-Karat gold?

Gold purity can be measured in two ways: karats and fineness. According to the World Gold Council, "karat" measures the purity of gold mixed with other metals. For example, 24-karat gold is considered pure because it doesn't contain other metals. However, gold is usually not perfectly pure in reality. The highest level of purity that can typically be achieved is 999.9 parts per thousand, which means there's a tiny fraction of impurities.

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What does gold fineness mean?

"Fineness" also measures gold purity, but it’s expressed in parts per thousand. In this system, 24-karat gold would have a fineness of 1.0 (meaning it's completely pure), while 22-karat gold has a fineness of about 0.916 (22 parts gold out of 24). Gold of this purity is often labelled as 999.9 fineness, indicating its virtually pure 24-karat gold.

What’s the difference between 999 and 995 fineness?

Vikas Singh, MD & CEO of MMTC-PAMP - a semi-government gold refinery was quoted as saying, “995, 999 and 999.9 purity levels are international nomenclatures used to define the purity of gold per 1,000 grams. At a weight of 1,000 grams of gold, a purity of 995 means that you get 995 grams of gold with 5 grams of another metal; 999 purity means 999 grams of gold with 1 gram of another metal, while 999.9 means you get only 0.1 gram of another metal while the rest is pure gold. The difference between 995, 999 and 999.9 fineness lies in the purity level of the gold.”

999 Fineness: This is the highest purity you can get with gold. It means that the gold is 99.90% pure, with only 0.10% impurities. This type of gold is commonly used for investment in coins and bars, known as bullion.

995 Fineness: This gold has a slightly lower purity, at 99.50%. While still considered 24-karat, it's not as pure as 999 gold. It's generally used in bullion and some jewellery applications.

The key difference between 995, 999, and 999.9 is the amount of gold in each measurement.

Experts say that 999 fineness is the purest gold you can get, while 995 fineness is standard for trading on the MCX and international markets. Both 999 and 995 are very pure, containing 99.90% and 99.50% gold, respectively. No refinery can consistently produce purer gold than these levels.

Why higher purity (999 fineness) gold costs more?

The higher the purity of gold, the more expensive it is. That's why 24-karat gold costs more than 22-karat gold. Similarly, gold with 999 fineness will cost more than gold with 995 fineness, even if both are 24-karat.

Why does the price difference matter?

Experts say that gold with 999 fineness is typically 0.4% more expensive than gold with 995 fineness. This difference reflects the added purity.

Surendra Mehta, the National Secretary of the India Bullion and Jewellers Association (IBJA), explains that this price gap is due to the purity level. For example, if gold with 995 fineness costs 100, then gold with 999 fineness will cost about 100.40.

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Why is 24-Karat gold jewellery rare?

Most jewellers don't sell 24-karat gold jewellery because it's too soft. You typically find 24-karat gold as bars, coins, or bullion.

Singh from MMTC-PAMP explains that gold with 999 fineness isn't strong enough for jewellery, so jewellers usually use 22-karat gold or lower, mixing gold with other metals for durability. However, 995 fineness gold can be used for coins, bars, pendants, and other small items.

Suvankar Sen, from Senco Gold & Diamonds, notes that jewellery is typically made with 22, 18, or 14-karat gold. Bars and coins are often available in 995 and 999 fineness. If you see 999 or 995 gold used in jewellery, it's usually in the form of bars or coins, which might be worn as pendants.

Sen adds that 24-karat jewellery is rare because it requires special machines to make it. Some markets in western India offer 23-karat jewellery, which is more traditional and often comes in smaller pieces.

Mehta points out that coins and bars are the main products made with 999 and 995 fineness gold.

Hallmarking and gold purity

The government made gold hallmarking mandatory from June 16, 2021, for six levels of gold purity: 14KT, 18KT, 20KT, 22KT, 23KT, and 24KT. For 24-karat gold, hallmarking uses a 995 fineness standard.

Mehta from the India Bullion and Jewellers Association (IBJA) explains that if you're buying 24-karat gold jewellery, hallmarking is required. However, if you're purchasing 24-karat gold in the form of coins, bullion, or bars, hallmarking isn't mandatory.