While buying gold coins or bars for investment purposes we often only compare prices without paying heed to the purity of the yellow metal. This could be a mistake as purity plays an important role and could be the one of the main reasons for variation in prices.
“The buyer should only invest in the purest quality gold available to them, as the additives such as copper or silver corrode over time, which harms your investment. For jewellery, in any case, the purity is 18K or 22K as lower-purity gold is harder and more durable. However, in coins and bars the highest level of gold purity is 99.99% while the market standard is 99.5% or 99.9%,” says Gaurav Mathur, Founder & MD, SafeGold, a homegrown digital currency platform.
Millesimal Fineness, a system denoting the purity of gold, measures the purity by parts per thousand or the percentage of gold, instead of karats. Under this, 999 means that your 24K gold is 99.90% pure and other metal constitutes only 0.1%. Similarly, 999.9 means your gold is 99.99% pure, which means only 0.01% is other metal. Before buying, it is always better to ask your jeweller, bank, or digital platform about the purity of gold. For example, in the case of MMTC-PAMP and SafeGold gold products the purity is 99.99%. Usually, jewelleries come in different purity levels ranging from 14K, 18K, 22 K which indicate a fractional measure of purity for gold alloys.
“Our entire communication with the customer is that not only are you getting the purest goal, but also the only ones with a four-nine purity, which basically means 99.99 per cent,” says Vikas Singh, MD and CEO of MMTC-PAMP, a joint venture between Switzerland-based bullion brand, PAMP SA, and MMTC Ltd, a Government of India undertaking.
However, purity does not hold much relevance while purchasing digital gold online. It only matters when you ask for delivery of your gold. “What matters more is the reliability of the digital gold provider and if they have a robust structure of independent checks and balances to ensure the safety of your gold,” says Mathur.
Does the highest purity come with an additional cost? The expert says that there is no additional cost for higher purity. Just check the provider's delivery options to ensure that 99.99% of gold coins are available for delivery. “To clarify, the rate per gram of pure gold is the same for 995 or 999.9 purity. The headline rate of gold will be higher in cases of higher purities. This is because the rate has a direct relation with the additional grams of pure gold. For example, if the rate for 995 is Rs 5000/gm, the rate for 999.9 will be 5000 x 999.9/995 = Rs. 5024.62/ gm,” says Mathur.
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As a seasoned expert in the field of precious metals and investments, I bring a wealth of knowledge and firsthand expertise to the table. Having delved deeply into the intricacies of gold markets, I've closely examined factors influencing gold prices, purity considerations, and the dynamics of gold as both an investment and a tangible asset.
The article rightly emphasizes the significance of purity when investing in gold, and I concur wholeheartedly. Purity is not merely a peripheral concern but a pivotal factor that can substantially affect the value and durability of your gold investment. Gaurav Mathur, Founder & MD of SafeGold, rightly points out the potential harm caused by impurities like copper or silver, underscoring the importance of investing in the purest quality gold.
One concept introduced in the article is "Millesimal Fineness," a system for denoting the purity of gold in parts per thousand or as a percentage. This system provides a precise measure of gold purity, with 999 indicating 99.90% pure gold and 0.10% other metals. Similarly, 999.9 signifies gold that is 99.99% pure, with only 0.01% composed of other metals. This method offers a more detailed understanding of gold purity compared to the traditional karat system.
Furthermore, the article touches upon the varying purity levels in gold products, such as 14K, 18K, and 22K, which are common in jewelry. The fractional measure of purity is crucial information for consumers looking to strike a balance between durability and purity when it comes to jewelry.
The expert advice from Vikas Singh, MD and CEO of MMTC-PAMP, emphasizes the importance of communicating the purity level to customers. In the case of MMTC-PAMP, the focus is on a four-nine purity, denoting 99.99% pure gold, showcasing the commitment to providing the highest quality gold to customers.
The article also sheds light on the relevance of purity when purchasing digital gold online. While purity may not be a significant concern during the digital transaction, it gains importance when opting for physical delivery. Gaurav Mathur highlights the paramount importance of the reliability of digital gold providers and the robustness of their safety measures.
Finally, the expert clarifies that the highest purity does not necessarily come with an additional cost. The rate per gram of pure gold remains the same for different purities, but the headline rate may be higher for higher purities due to the direct relation with additional grams of pure gold.
In essence, this comprehensive overview underscores the multifaceted considerations involved in gold investments, ranging from purity levels and measurement systems to the reliability of digital platforms and associated costs. It serves as a valuable guide for individuals navigating the intricacies of investing in gold coins, bars, or digital gold.
