As other precious metals, gold is measured by troy weight and by grams. And when it is alloyed with supplementary metals the term carat or karat is used to specify the amount of gold present, with 24 carats being pure gold and lower ratings being proportionally less. The purity of a gold bar can also be written as a decimal figure ranging from 0 to 1, known as the millesimal fineness, such as 0.995.

Carat and gold price

Carat is a measure of the purity of gold and platinum alloys. One carat is one twenty-fourth purity by its weight. Thus 24-carat gold is pure gold (99.99%); 12-carat gold is 50% purity, et cetera. In the United States and Canada, the word karat is typically used for the measure of purity, while carat is referring to the measure of mass.

The carat system is gradually more being complemented or superseded by the millesimal fineness system where the purity of precious metals is denoted by parts per thousand of pure metal in the alloy.

The most frequent carats used for gold in bullion, jewellery making and goldsmith are:

24 carat (millesimal fineness 999), 22 carat (millesimal fineness 916), 20 carat (millesimal fineness 833), 18 carat (millesimal fineness 750), 16 carat (millesimal fineness 625), 14 carat (millesimal fineness 585), 10 carat (millesimal fineness 417) and 9 carat (millesimal fineness 375).

The open market gold price

The gold prices is determined on the open market, but a procedure recognized as the Gold Fixing in London, originating in 1919; provide a twice-daily benchmark figure to the industry.

The historically gold price

Historically gold was used to back currency in an economic system recognized as the gold standard a certain weight of gold was given the name of a unit of currency. For a long period, the United States government set the value of the US pound so that one troy ounce was equivalent to £20.67 (£664.56kg), but in 1934 the pound was revalued to £35.00 per troy ounce (£1125.27kg). And by 1961 it was becoming harder to uphold this price, and a pool of US and European banks agreed on manipulating the market to stop further currency devaluation against increased gold demand.

On 17 March 1968, economic conditions caused the collapse of the gold pool, and a two-tiered pricing scheme was established and gold was still used to settle international accounts at the old £35.00 per troy ounce (£1.13g) but the price of gold on the private market was allowed to rise and fall; this two-tiered pricing system was discarded in 1975 when the price of gold was left to find its free-market level. Central banks still hold historical gold reserves as a store of value even though the level has generally been declining. The biggest gold depository in the world is that of the U.S. Federal Reserve Bank in New York.

Ever since 1968 the price of gold on the open market has ranged widely, with a record high £850oz (£27,300kg) on 21 January 1980, to a low £252.90oz (£8,131kg) on 21 June 1999 (London Fixing). On 26 April 2006 the London gold fixing was £635.50oz.

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Whenever you plan to buy gold, it is important that you keep in mind certain things like a credible seller, the quality and purity of gold, the current rates of gold and the fluctuating trends of market. Buying gold should not be an impulsive decision because one has to be careful while buying it and consider the above mentioned characteristics.

People either buy gold for personal use like jewellery; gifts etc. or they buy it for investment purposes. Whatever the purpose of buying gold is, it should only be bought from an authentic and credible source. You can easily be fooled by frauds who may sell you fake pieces as gold.

Gold occurs in its natural and purest form when extracted from its ores. Pure gold is rated as 24 karat gold and it is priced against the US Dollar on daily basis. This form of pure gold is converted into bars, coins or bricks of different weights ranging from a few grams to kilograms.

This type of gold is sold and bought for investment purposes, and each gold bar, coin or brick is engraved with ‘999′ symbol or stamp, indicating its purity. Only licensed companies can engrave this on gold bars and this is the main sign that you should look for when buying gold for investment purpose.

Gold for investment purpose is also sold in the form of 22k and 18k in the market. Their prices are relatively lesser than 24k gold. The daily fixed prices of 22k and 18k are also rated and when you buy gold, make sure that you are aware of the actual prices. Usually there is no bargaining when you buy pure gold, but if you have done your homework well, you can avoid buying overpriced gold.

You should also keep an eye on the market trend of gold. Sometimes the price of bullion remains steady over a long period of time; sometimes the price is going up all the time; and sometimes the price of gold is declining. You should study the market trend and buy wisely and accordingly. One can get real benefit from bullion investment if it is done for a fairly long period of time.

Ideally, you should buy gold when the price of bullion is falling against the US dollar. Later when the prices get stable, or go higher you can sell it to get immediate profit. Being a small investor, you should not risk buying or selling bullion too often because instead of reaping profits, you might suffer heavy losses.

If you are a big investor, you can contact the London Bullion Exchange and buy gold directly from there. Gold stocks and bullion funds are also available for better and secure investment. You should choose a reliable investment company who deals in bullion funds, bullion futures and bullion stocks. According to some experts, bullion funds and stocks are more reliable, safer and more profitable than buying solid bullion.

Learn how to buy gold by taking help of professionals and reduce risks of loss for investment

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We admire and desire gold, there is certainly no doubt about that. However, we don’t know much about it. In addition, what we do know is very little. Read the mentioned facts below and be honest with yourself when asking how many of these you already knew.

1. All seven continents have gold buried beneath their crusts.

2. The production of gold is minimal. Since ancient times, more steel is produced per hour than gold .

3. The melting point of gold is 1064.43 centigrade.

4. Gold never rusts, as it is inert.

5. It is believed that most of the earth’s gold (almost 80%) is still buried underground.

6. As per a medical study in France carried out during the twentieth century, gold is an effective treatment for rheumatoid arthritis.

7. Gold is edible, and is put into fruit, jelly snacks, coffee, and tea in some Asian countries. Even Europeans are known to put gold leaf in bottles of liquor.

8. John Deason and Richard Oates of Australia found the largest nugget of gold in 1869. The nugget weighed 2248 ounces of pure gold and was 10 by 25 inches. The most amusing thing is that it was found only two inches below the ground’s surface.

9. Due to gold being inert, it does not cause skin irritations. You should remember this, and if your gold jewellery causes skin irritations, then it is probably not pure gold.

10. One cubic foot of gold weighs half a ton.

11. The largest gold bar weighs 200 Kg.

12. Olympic gold medals are not pure gold. They used to be, until 1912.

13. As per a Greek myth, gold was a dense combination of water and sunlight.

14. King Ferdinand of Spain coined an immortal saying in 1511, “Get gold humanely if possible, but at all hazards get gold.”

15. Gold and copper were the first metals to be discovered by men in 5000BC.

16. What is harder to find: a one-ounce gold nugget or a five-carat diamond? A one-ounce gold nugget is harder to find.

17. In every cubic mile of seawater, there are 25 tons of gold. There are 10 billion tons of gold in the oceans.

18. Only 88000 tons of gold have been mined from the earth since records were kept.

19. It is harder to win a major state lottery than it is to find gold.

20. A carat was actually a unit of weight based on the carob bean, and used by Middle East’s ancient merchants.

21. The carat is still used as a measure of weight for gemstones.

22. The Egyptian civilizations were the first to use gold for jewellery.

23. Most cell phones, computers, calculators, television, and other electronic items contain gold.

24. Gold is the only precious metal that is yellow or golden in colour.

25. 90% of the gold has been discovered in the earth’s surface in deserts, mountains, tropical climates, and Arctic regions.

Jack Wagon is a gold expert. If you want to know How to buy gold you may visit his recommended site

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