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Are you new to investing in precious metals? Purity is one of the essential factors to consider. Even minor differences can significantly impact the value of bars and coins.
“Triple nine” purity of 99.9 percent may be the “gold standard” in the precious metals industry, but bullion bars and coins with other purity levels can be found on the market, too. Here’s what you need to know.
Gold and Purity Levels
So-called “pure gold,” also called 24-karat gold, must have a fineness level of 990 (99.00 percent). This means that 99 percent of its content is pure gold, while the tiny remainder is made up by other metals.
Other purity levels are also available, including:
Some gold bullion, especially coins, have added nickel, zinc, copper, palladium, or cadmium. Krugerrand coins use copper, for example, giving them a distinct appearance.
The purity of silver is expressed as “parts per thousand” (ppt). The numbers you see printed on bullion bars refer to the level of silver contained therein, just as with gold. Again, 999 is a common and popular fineness in the silver industry.
Sterling silver has a purity level of 925, meanwhile.
The Purity of Platinum and Palladium
The purity levels of platinum and palladium are also expressed as parts per thousand, as with silver. However, these harder metals often have significantly higher purity levels.
While 999 (99.9 percent) is a common purity level in platinum or palladium used for investment purposes, 950 (95.00 percent) is often used for jewelry. That is because added metals can make it more durable.
General Recommendations for Future Precious Metals Investors
Investors generally prefer higher purity levels, as these precious metals have the highest value. Investing in precious metals with a purity of 999 is usually a good choice. However, people with more modest budgets may make precious metals with lower purity levels a solid choice, too.
Meanwhile, numismatic coins (and, on occasion, bars) do not only derive their value from their purity levels but also from their historical significance and collector’s value. In this case, considering coins with a lower purity can be worthwhile.
Kruggerand coins are, for example, a very popular investment option. These South African coins are made with 22-karat gold, meaning they are made up of 91.67 percent gold and 8.33 percent copper alloy.
Purity is an important consideration when investing in precious metals, but it is not the only factor to keep in mind as you decide which bars or coins are most suitable for you.