We created this section to help you understand some of the terms commonly used to express precious metals purity, volume, and weight measurements. We will be expanding this section, so if there are specific terms you wish to learn more about, please let us know, and we will make sure to add the relevant information with our future updates.
Despite the fact that golden money was substituted by paper bank notes a long time ago, investing money in gold remains the most efficient way to hold capital and to insure it against depreciation. People tend to insure their savings, especially during recessions or wars, by converting their money into gold, which never loses value.
One of the ways to save is buying bullion coins that are issued by banks specifically for saving. These coins are usually labeled by hallmarks indicating mass (in oz) and sometimes indicating nominal value. The labeled nominal value is always lower than the true value because a bullion coin is a piece of jewelry.
The first bullion coin was issued in the South African Republic (SAR) in 1967. Today, bullion coins are issued in almost all countries of the world, and the most famous gold coins come from Australia, United Kingdome, SAR, US, France, and Russia. Generally, collection and anniversary coins made of gold, palladium, or platinum may be regarded as bullion coins. The metals mentioned are usually used for producing bullion coins.
Ingot is a bar of silver or gold used for saving capital - in much the same way as with bullion coins. Ingots vary by weight, shape, and means of production. Ingots are usually cast: metal is smelted, poured into a form, and then solidified assuming the shape of the form. There are also chased ingots cut from flat platens of metal with each bar labeled with a stamp. Recently, another way of storing gold has been developed– a Chip Gold ingot. This is a small bar of gold (under 20 g or 0.7 oz) pressed into a special packaging that looks like a credit card.
Golden ingots came into use in 6th century B.C. They were used in major cities as currency in the trading process. Because gold and silver needed to be weighed every time there was a transaction, the free exchange process was inconvenient. Labeled ingots appeared in 6th century BC in Lydia. They were made of silver and gold alloyed in certain proportions. The alloy was called electrum. The idea of casting ingots and using them for trading was such an appreciated advance that in merely 45-50 years, all payments were made with ingots.
There are two spellings of the word carat. Carat spelled with a "C" and abbreviated as "ct" is the conventional unit used by jewelers worldwide to measure volume, mass, and purity of pearls and gemstones. More information about the carat is available in Gemstones Glossary. Karat spelled with a "K" and abbreviated as "K" is used for defining the purity of precious metals.
To indicate how much precious metal an alloy contains, the British system of hallmarks is used: an amount of alloy consists of 24 nominal portions; one portion stands for one carat, which is marked by letter K. So, if all the portions an alloy contains are gold, it indicates a pure, solid gold containing no other admixtures and is hallmarked with 24K. Eighteen karat gold (18K) means that metal contains 18 parts of gold and 6 parts of admixtures. In much the same way, one can assume that 14K gold contains 10 parts of admixtures, and 10K gold contains 14 parts of admixtures, etc.
In the US and Europe, the purity of gold is measured in karats, while in the countries of the former USSR it is measured by the millesimal standard. The millesimal standard is the three digit number that is sometimes provided after the karatage. The millesimal standard, another way to denote the purity of a metal, refers to the parts per thousand that are pure gold. Gold bars usually consist of pure gold, which is 24-karat gold (999.9). The least pure gold is 9-karat gold (375) or 10-karat gold (417). The most frequently used golds in the jewelry industry are the 14-karat (583) and the 18-karat gold (750).
The Troy ounce is a generally approved unit for measuring the weight of ingots and bullion coins, as well as of some other unrelated precious substances. One troy unit equals 31.1 g or 1.1 oz. The Troy weight of gold is indicated as XAU (Au is the chemical abbreviation of gold). In the same manner, the troy weight of silver is XAG (Ag for Argentum), XPT for platinum, XPD for palladium etc.
The Roman ounce differed a bit from the Troy weight unit; it equals 27.28 g or 0.96 oz. Troy weight was named after the town of Troyes, which is situated in the northern part of France. Nowadays, it is a small town, but in Medieval Europe it was one of the most significant trade centers with spectacular fairs. Troyes was also famous for the most precise weighing machines, which is why the weight unit used for the most precise measurements is named after Troyes.