The Difference Between Karat and Carat

Investing in Gold Basics

Published: April 28, 2022

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When shopping for jewelry or precious metals like gold, you’re sure to come across terms like “carat” or “karat.” Oftentimes, the two terms are mistakenly used interchangeably, and they even sound the same when spoken aloud, contributing to confusion about what exactly is the difference between a carat and a karat?

The difference is significant and can be nuanced, but in general, carat refers specifically to the weight of a diamond or gemstone, while karat is a measurement of the purity of gold. When you’re looking to buy gold or gemstones, understanding these terms, what they mean, and how they contribute to the value of an asset is key to making an informed investment that holds its value.

What Is Karat?

Simply put, karat is a measurement of how pure a piece of gold is, with 24 karat gold being the purest, and lower karat gold having a larger quantity of other metals mixed in. Since 24K is the maximum, dividing the karat number by 24 will give you its approximate purity. For example, 18K would be 75% gold, and 12K would be 50%.

Valuation

Generally, the higher the karat the more valuable the gold is, but other qualities contribute to its worth. Understanding these is key to knowing how to buy gold. With gold coins and bars, karat value, size, and weight have a fairly straightforward relation to overall value. However, with jewelry, it can be a bit more complicated, as there are other factors to take into account. 

Higher karat value isn’t a universally positive metric with jewelry, since the more purity gold has, the less durable it is. For that reason, most gold jewelry is 14K or 18K. Jewelry is meant to be aesthetically pleasing as well, so color, design, and even inlaid stones also play a part in the price. Different colors of gold may even help mask imperfections in the color of a diamond, so there are many aspects to consider.

Quality Differences

The purer gold is, the more vivid its color will usually be. Lower karat gold has higher amounts of non-gold metals in the mixture that can alter the color significantly. Sometimes these metals react with sweat and cause discoloration to the metal or even skin that comes in contact with the jewelry, so it’s important to be sure gold is real before buying it.

Durability

It may seem like a pure gold ring would be ideal, but 24K gold is too soft for use in jewelry. For that reason, jewelers mix in other metals with the gold, giving it better durability, and perhaps even a more pleasing color. So if it is something you will wear regularly, you’ll want it to be able to endure some wear and tear. Of course, metals added to the gold alloy can become discolored, and the lower the karat, the more likely discoloration is.

What Is Carat?

Carat is the measurement of the weight of a diamond or gemstone. One carat is equal to 200 milligrams. It’s important to note that the carat value doesn’t necessarily correlate to the size of the gemstone. A diamond with a higher carat size will likely be bigger than a smaller carat size, but the cut of the diamond may make it hard to distinguish. For that reason, a measurement of millimeters gives a more exact measurement of the size.

Valuation

While a higher carat diamond will generally be worth more than a lower carat diamond, the valuation of a diamond varies a lot and the carat value is only part of the equation. Color, clarity, and cut also play a huge part in the overall value of a diamond. That said, it is important to understand the carat’s role in the equation, so that you can better evaluate whether a gemstone is a good investment for you.

Quality Differences

With a higher carat value, clarity and color become more important as well. The larger a diamond, the easier it is to see its color and any other possible imperfections, so a higher color grade is more desirable. While carat on its own contributes to the price of a diamond, the increased need for better color and clarity can significantly compound the price.

Durability

Carat doesn’t play a huge role in the durability of a diamond. With diamonds, clarity is a large contributing factor to durability. The lower the clarity, the more flaws the diamond has. This includes things like fractures and other imperfections in the diamond, which could compromise the structural integrity of the stone.

History of Karat and Carat in Jewelry and Investment

According to Merriam-Webster, the origin of both “carat” and “karat” can be traced back to the same source, which explains the similarities between the terms. Originally, the Greek word “keration” referred to the carob bean, which was used as the standard for measuring gemstones due to its similar size and weight.

The silver Roman coin “siliqua” was named for the carob seed and valued at 1/24 of a gold “solidus.” Eventually, the term “karat” emerged, and the concept broadened to describe the proportion of gold to other metals in an alloy.

Consumer confusion over the gold karat meaning can result in misinformed purchases. For instance, there is a huge difference between a bar plated in 23K gold, and one of solid 23K gold. So it is important to know what you are looking at before you decide to buy.

Genuine gold from legitimate sources will have a hallmark stamp to let you know the purity, manufacturer, and more information. To ensure your investment is safe, you should always buy gold from a trusted source. If investing in gold from a company that specializes in precious metals, check that they have accreditation and a good reputation. It’s important to make sure your investment is in good hands.

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