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What is gold fineness?

If you’ve looked into investing money in gold bullion, you’ve probably learnt a thing or two about purity. You may know a thing or two about karats and you definitely would have come across the term “fineness”. What is fineness exactly? This is a term that represents the weight of fine metal on an object mostly bullion bars and coins. To simplify things, one can say fineness is to gold bullion what karats are to gold jewellery.

If gold bullion bars are made with the purest gold what is the difference between .9999 and .999? To understand this, we first need to talk about how the purity of gold is measured.

understand how gold is measured.

There are basically two ways that the purity of gold is measured: the karat system and the millesimal fineness.

Millesimal fineness denotes the purity of gold bullion on parts per thousands. Karats are a fractional measure of gold per 24 parts of the whole hold alloy. The karat scale goes from 24k which is the purest form of gold or 99.99%.  This is followed by 22k which denotes 91.67%, then it’s 18, 14 and ten Karats which denotes 75%, 58.5% and 41.7% purity respectively.

The purity of gold depends on the refining processes. There are different technologies that can be employed and standard vary from refiner to refiner or country to country. It is widely accepted that the gold bullion has a fineness of 99.5%. Most European gold bullion buyers expect a purity of 99.99% gold can still be refined to within an inch of achieving 100% or .99999 it’s a matter of cost for most refiners. The five 9s or .99999 fineness sell at high premiums because gold with that fineness has more intrinsic value that gold with a fineness of .9999. it might sound frivolous but a gold bullion dealer will pay more for a product with a .9999 fineness than a product with a purity level of 995 even though it is still classified as bullion. Austrian Ducats have a 98.6% and Krugerrands have a 91.7% purity, Austrian Ducats are as gold bullion coins and the others aren’t.

The Royal Canadian Mint is famous for producing gold bullion products with high fineness. They may the first mint to produce .99999 fine bullion.

According to the mint, they employ two refining methods: the Miller chlorination process which refines gold to a .995 level of purity.  The chemical process is followed by an electrolytic process called the Wohlwill electrolytic process which refines the gold to a 99.99 level of purity and beyond.

The refining process starts with the refiner receiving the gold doré from the mines or used scrap gold.  refiner. Once the gold has been refined it is sold to gold dealers or central banks. Manufacturers of products involving gold will buy this refined gold to do as they will with it. Mints also produce bullion coins and bars that are sold to private investors. To verify the purity of gold a bullion dealer can either melt the gold down and assay it.  This is considered to be very accurate. The second method of verifying the fineness of is by using an XRF machine. This method is less cumbersome, quicker and relatively accurate compared to the fire assay method. Most gold buyers will have an XRF machine on hand to determine the purity of the gold that is sold to them.

99.99% is the closest level of purity you can get for gold. 100% is virtually impossible but it doesn’t stop refineries from trying to achieve that perfect fineness. The Royal Canadian Mint produces some of the purest gold bullion coins in the world. One example of a very fine gold is the coin 99.999% fine gold coin created to commemorate the Silver Maple Leaf’s 30th Anniversary commemorative.

Five 9s coins are followed by four nines – the American Buffalo coin is made from this. The three 9s are the most common coins. The minimum fineness allowed by Good Delivery standards is 995. You get coins with a fineness of 990 but this is rarely seen.

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