Your 24 karat gold is of 999 or 995 fineness? Check before buying

If an individual wants to buy the purest form of gold, then 24karat (k) gold is the available option. One can buy 24k gold in the form of coins or bars (bullion). However, coins and bullion usually carry the mark of 999 or 995 fineness. This can lead to confusion as many people are unaware that there are two methods to measure the purity of gold.

The two ways to measure purity of gold are karats and fineness. According to the World Gold Council website, karat is a measurement of purity of gold alloyed with other metals. 24karat gold is considered pure gold as no other metal is mixed in it. Fineness is another way to express the amount of gold content in any object. It is expressed in parts per thousand. So 24karat gold should have 1.0 fineness (24/24 = 1.00) and 22karat gold should have 0.916 fineness (22/24 = 0.916).

However, in practice, gold is likely to have a slight impurity as the precious metal can only be refined to a fineness level of 999.9 parts per thousand. Such gold is classified as being of 999.9 fineness (24 karats).

Which is better - 999 or 995 fineness?

Vikas Singh, MD & CEO of MMTC-PAMP - a semi-government gold refinery - says, "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."

According to experts, 999 fineness is the purest gold one can own whereas 995 fineness is considered as standard gold, which is used for trading purposes on MCX and in international trading. Both 999 and 995 fineness are the purest forms of gold as they have 99.90% and 99.50% pure gold, respectively. No gold refinery can consistently produce pure gold greater than these levels.

How expensive is 999 gold?

As the purity of gold increases, it becomes more expensive. This is why 24karat gold is more expensive than 22karat gold. Similarly, 999 fineness gold will be more expensive than 995 fineness gold, even if both are of 24 karats.

According to experts, the international prices of 999 fineness are usually higher by 0.4% or half a percentage as compared with 995 fineness. So, in the bullion market also, 999 purity gold's prices are 0.4% higher than those of 995 purity gold.

Surendra Mehta, National Secretary India Bullion and Jewellers Association Ltd (IBJA), says, "Price difference is based on purity of the gold. If price of 995 fineness gold is, say, 100, then price of 999 fineness gold will be 999/995*100 = 100.40."

Gold jewellery options in 24 karats

Generally, not many jewellers sell 24karat gold jewellery options. Only bars, coins and bullion can be bought in 24karat purity.

Singh from MMTC-PAMP says, "Gold at 999 fineness is not hard enough to make jewellery. Hence, 22k gold and below is used for the making of jewellery as gold is combined with other metals to improve hardness, malleability and strength. However, gold items in 995 fineness in the market can include coins, bars, pendants and other ornaments."

Suvankar Sen, MD & CEO of Senco Gold & Diamonds, says, "Jewellery manufacturing is only done in 22, 18 and 14 karats. Usually, bars and coins are available in 995 and 999 fineness. And in general, 999 and 995 gold jewellery is only available in the form of bars and coins, which can be worn as pendants on chains."

He explains that 24karat jewellery is very rare and special machines are required to make them. However, 23karat jewellery is sold in certain markets of western India. "Such jewellery is more culture-based and traditional and available in small sizes and pieces."

Mehta says that only gold coins and bars can be bought in 999 and 995 fineness.

What are hallmarking rules for 24 karat gold?

The government has made gold hallmarking mandatory for 6 levels of purity of gold from June 16, 2021. The specified karatages are: 14KT, 18KT, 20KT, 22KT, 23KT and 24KT. Further, for 24karat gold, 995 fineness is used.
Mehta from IBJA says, "If gold jewellery of 24 karat is bought, then hallmarking is mandatory. However, if gold coins, bullion or bars of 24 karats are bought, then hallmarking is not mandatory."