Gold prices don’t mimic those of assets like shares. When bad news with serious economic consequences is broken, gold prices tend to go up. Out of the last five major recessions, only one has seen the price of gold go down. The rest saw the price of gold go up significantly.
2020 started with more bad news than most recent years have. At the same time, one asset, gold, is seeing its price rise steadily. Gold started the year at $1,519 per ounce but is already at $1,677 as of the 5th June.
As a “safe haven asset” it's likely that gold will either continue to rise in price or at the very least stay at its normal price for the remainder of 2020.
Whether you’re looking to invest in gold soon or just sell some gold you already have, it’ll pay to learn more about gold. Gold investing for beginners can be difficult otherwise. Understanding the value of the gold you’re looking at is the first step to understanding what it’s worth in dollars. So, how do you know if the gold you’re looking at is pure? Today lets take a look at the gold fineness, and the gold purity scale.
Gold has its own measurement system that you need to understand to be able to evaluate it. So, let's go over the most valuable forms of gold and how they’re measured.
What does 9999 Mean on Gold?
A 9999 mark on gold represents refined gold. Refined gold is pure and has very few impurities.
Normally, gold is measured by a number. The number usually doesn’t surpass 3 digits. That’s because the number hallmarked on gold represents a percentage of purity. For example, 999 is a very common mark you’ll see on gold. 999 represents gold that is 99.9% pure. Likewise, 916 means the gold is 91.67% pure.
The second measurement for gold is karat. Karat is measured as a fraction of 24, with 24 being 99.9% or higher pure gold. 916 gold, which is 91.67% pure, is the marking of a 22 karat piece of gold. But where does the extra 9 in 9999 come from?
9999 is the purest form of gold you’ll find on the market. That’s because it’s refined and contains almost no impurities whatsoever. If someone tells you they have a piece of 24 karat gold jewelry, they’re suggesting the jewelry is 99.9% gold or more, which would be hallmarked with 999 or 9999. Other measurements are represented in the chart below:
417 - 10 Karat: 41.7% pure
585 - 14 Karat: 58.5% pure
750 - 18 Karat: 75% pure
916 - 22 Karat: 91.67% pure
999 - 24 Karat: 99.99% pure
So, always look for the hallmark that lets you know the purity of the gold. 9999 gold is refined to be so pure it exceeds the minimum requirements to be considered 24 karat gold. But 9999 gold is only determined post-refining. Different parts of the world have different methods for determining how pure the final product is.
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Most gold you’d see in coins or casual use won’t be completely pure. But fine gold marked 999 or higher is more commonly found, despite a strong market preference for even purer gold. So, what defines “pure” gold and just “fine” gold?
Difference Between Fine Gold and Pure Gold
9999 doesn’t necessarily mean that the gold you’re looking at is pure. Pure gold is hard to find. That’s because exceeding the 9999 mark and producing 99.999% or purer gold is quite difficult.
To get more than 999 pure gold, the refinery needs to take a cast gold anode and place it in a specifically measured acid-based electrolyte. They then need to create an electric current that dissolves all the metal present. That means the gold and all the trace metals in the mix are broken down.
Next, they just need to attract the gold with a charged cathode. Once that’s done, they remove the gold and repurpose it, typically into a more valuable bullion product like a collectible coin.
The above process creates very valuable gold.
Unfortunately, it’s not flawless. The purer the gold product you’re trying to create, the more difficult it becomes. Items exceeding 9999-level purity are rare and very valuable. Most coins that reach 99.999% purity or better are collectibles that sell for a much higher price than the price of their weight in pure gold alone.
So, fine gold refers to any gold item that is almost pure, starting at 99.9% purity. That’s because “pure” 100% gold is almost impossible to produce. So, the purest gold that’s commercially available is 99999 gold. Most of the time, 24 karats fine gold is just 999-hallmarked gold.
Keep in mind that 24 karat gold is considered technically “100% pure”. In reality, 24 karat gold is usually just marked 999 and is 99.9% pure. Once you exceed that level of purity, the value of the final product typically goes up thanks to its collectible nature.
9999 Gold Prices vs 999 Gold
The price of a gold item is based on its weight by default. For example, if you have a 1-ounce gold coin that’s 90% pure. The coin is worth 90% of the current price of gold per ounce. But what if the coin is beyond 99.9% pure? How about 99.99% pure?
Such marginal improvements in the purity of gold bullion won’t increase the melt value of a gold item. But when a refinery goes through the trouble of exceeding standard 24 karat purity, there’s usually another reason. The other reason for going through the trouble of refining gold beyond 24 karats is to create a special item. Only a few mints in the world go through this trouble.
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A 9999-labeled gold bar or coin will be more valuable than a 999-labeled bar or coin. That’s because of the limited availability of such pure gold bullion.
As a beginner investor in gold, it may not be in your best interest to search specifically for 99.99% or purer gold. If you just want to invest in gold for its weight in pure gold, you can just buy a standard gold coin or bar that’s 99.9% pure. But if you’re a collector and you want to invest in a rarer and more valuable gold product, gold with that 9999 hallmark might be in your interest.
The decision to buy purer gold is yours to make. But know that when you invest in the very purest gold bullion on the market, you’re investing in more than just gold as listed on the markets. The price of gold as listed on indexes refers to 1-ounce gold. When measuring an ounce of gold, the extra decimal at the end of 99.99% won’t be especially significant. At most, it will add a half Pound onto the value of an ounce of gold. But collectible 9999 or purer gold items like minted coins will offer extra value from their rarity and collectability.
Should you buy 9999 Gold?
Buying gold isn’t a bad idea, especially while the price of gold is still moderate. That applies to 999 gold, 9999 gold, or even gold stocks. The world is moving into rough economic waters and the price of gold has been rising through 2020. Under these circumstances, any gold investment is a good investment.
You can find all kinds of gold bullion from many different sources. But these days more and more people are looking online for their gold bullion. That’s because reputable bullion retailers have made online gold purchases seamless and convenient. If you shop at a large, reputable bullion retailer like Money Metals, you can order gold with the weight and purity of your choosing.
So, 9999 gold can serve as a valuable investment. However, any gold is good gold under current market conditions.
You can also checkout our latest article on buying a business for another lucrative investing opportunity.