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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