Two gold chains can look identical, weigh the same, and be worth substantially different amounts. The difference is stamped somewhere on the clasp in small figures most people never examine. Understanding what those figures mean is the difference between knowing what you own and guessing. This guide from The Finance Reveal explains how gold karats work, part of our Investing section. This is general information, not investment advice; metal prices fluctuate constantly and hallmarking standards vary by country.

What Karat Actually Measures

Karat measures purity as a proportion of 24 parts. Pure gold is 24 karat, meaning all 24 parts are gold. Everything below that is an alloy, where gold is mixed with other metals such as copper, silver, or zinc. So 18 karat is 18 parts gold out of 24, or 75% gold, and 14 karat is 14 parts out of 24, roughly 58.3%.

Alloying is not adulteration. Pure gold is remarkably soft and deforms easily, which makes it impractical for jewelry worn daily. The added metals provide durability, and they also determine color: copper produces rose tones, while combinations including nickel, palladium, or silver produce white gold. A ring in 24 karat would scratch and bend in ordinary use, which is why the most durable jewelry is generally not the purest.

Purity Against Price

The relationship between karat and value is proportional and easy to calculate. The table below sets out the common grades.

Many countries use the three-digit millesimal system rather than karats, so 750 means the same as 18k and 585 means the same as 14k. Both markings describe identical metal. To estimate the melt value of a piece, take its weight, multiply by the purity proportion, and multiply by the current gold price for that weight unit. Note that gold is priced in troy ounces rather than standard ounces, a distinction our guide to the troy ounce explains, and getting it wrong overstates value by roughly 10%.

Regional preferences differ considerably. Higher purity grades such as 22k are common in South Asia and the Middle East, where jewelry often serves a savings function, while 14k and 18k dominate in Europe and North America, where durability is weighted more heavily. Neither approach is wrong; they reflect different purposes.

What This Means When Buying or Selling

The most important practical point is that jewelry rarely sells for its melt value. Retail prices include craftsmanship, brand, retail margin, and design, and those components largely do not survive resale. Someone selling to a buyer who values the piece by metal content should expect a figure based on the gold alone, often less a processing margin, which is typically well below what was paid.

Exceptions exist where a piece has genuine collectible, antique, or designer value, in which case selling it as jewelry rather than as metal is usually far better. Investment-grade bullion behaves differently again, trading much closer to spot price precisely because it carries no craftsmanship premium, which is one reason our guide to investing in gold treats jewelry and bullion as different propositions. Before buying, check the hallmark, understand that a higher karat means softer metal, and be wary of unmarked items or of plated pieces described ambiguously, since gold plated and gold filled contain very little gold. Before selling, get several quotes, know the current spot price, and weigh the piece yourself. The essential message is that karat measures gold content out of 24 parts, that 750 and 585 are the same information in millesimal form, that alloying exists for durability rather than dilution, and that jewelry resale reflects metal content rather than what you paid. For related basics, see our guide to gold versus silver, and explore the full Investing section.

Frequently Asked Questions

What does 14k gold mean?

It means 14 parts gold out of 24, or approximately 58.3% gold by content, with the remainder made up of other metals such as copper, silver, or zinc. In the millesimal system used in many countries, the same metal is marked 585. The alloy metals add durability and influence color, since pure gold is too soft for jewelry worn regularly.

Is higher karat gold always better?

Not for practical purposes. Higher karat means more gold and therefore more metal value, but it also means softer, more easily damaged metal. A 24 karat ring would scratch and deform in ordinary daily wear. For jewelry that is worn constantly, 14k or 18k is usually a better balance of value and durability, which is why those grades dominate in many markets.

How do you calculate what gold jewelry is worth?

Multiply the weight by the purity proportion, then by the current gold price for that weight unit. Be careful with units, since gold is priced in troy ounces rather than standard ounces and confusing the two overstates value by roughly 10%. Remember that this produces melt value, which is generally lower than retail price and lower than what a piece originally cost.

Why is jewelry worth less than you paid for it?

Because retail prices include craftsmanship, design, brand, and retail margin, and buyers valuing a piece by metal content do not pay for any of those. Most buyers also apply a processing margin. Pieces with genuine antique, collectible, or designer value are the exception and are usually better sold as jewelry rather than melted for metal content.

The Bottom Line

Karat measures gold purity as a proportion of 24 parts, so 24 karat is pure gold and everything below is an alloy mixed with metals such as copper, silver, or zinc. That makes 18 karat 75% gold and 14 karat approximately 58.3%. Alloying is not dilution for its own sake: pure gold is very soft and deforms in ordinary wear, so the added metals provide the durability that jewelry needs, and they also determine color, with copper producing rose tones and nickel, palladium, or silver producing white gold. This is why the most durable jewelry is generally not the purest, and why higher karat is not straightforwardly better. Many countries use the millesimal system instead of karats, where 750 means the same as 18k and 585 the same as 14k, describing identical metal in different notation. To estimate melt value, multiply weight by the purity proportion and then by the current gold price for that weight unit, taking care to use troy ounces rather than standard ounces, since confusing them overstates value by roughly 10%. Regional preferences vary meaningfully, with higher grades such as 22k common in South Asia and the Middle East where jewelry often serves a savings function, and 14k and 18k dominant where durability is prioritized. The most consequential practical point concerns resale. Jewelry rarely sells for anything near its retail price, because that price included craftsmanship, design, brand, and retail margin, none of which survive a sale valued on metal content, and most buyers apply a processing margin as well. Pieces with genuine antique, collectible, or designer value are the exception and should usually be sold as jewelry rather than metal. Investment-grade bullion trades much closer to spot price precisely because it carries no craftsmanship premium. Before buying, check the hallmark and be wary of unmarked items or plated pieces, since gold plated and gold filled contain very little gold. Before selling, weigh the piece, check the spot price, and obtain several quotes. For related guides, see our articles on the troy ounce, investing in gold, and gold versus silver, and explore the full Investing section. This article is general information, not personalized investment advice, and metal prices fluctuate constantly.