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Gold is highly regarded as a sound investment asset. Most investors rush to convert their assets to gold during financial crises since it retains its value. However, it can be challenging to decide which of the two types of high value gold you should invest in - 22k or 24k gold.
24k gold is better for investment. Though it scratches easily and isn't as durable as 22k gold, 24k gold has a higher intrinsic value as it is made of 99.9% pure gold, as opposed to 22k's 91.67%.
In this article, I’ll go further into detail about when 24k is a better investment product. Additionally, I’ll let you know about the differences between the two and provide you with helpful tips about investing in gold.
22k vs. 24k Gold: Determining the Better Option
Gold conveys wealth and power, which makes pure gold or solid gold jewelry extremely valuable. Most people looking to buy gold jewelry or invest in gold go for high karat gold pieces, and in most cases, this means either 22K or 24K gold.
However, if you can only choose one, which is the better option? To answer this question, we need to understand what the K in 22k or 24k gold means.
K stands for Karat. It refers to the purity of gold (keep in mind that this is different from C for Carat. Carat is a measure of weight, and it is typically used when talking about gemstones such as diamonds rather than gold).
Gold is rated on a scale of 0-24, with a higher karat value indicating a higher level of purity. In other words, the numbers 22 and 24 signify the purity rating of the piece of jewelry.
Hence, 24k jewelry indicates that the gold is the purest option possible on the market. If a piece is rated 24 carat rather than 24k, it refers to the weight of the gold, not its purity.
Other numbers used to symbolize the purity of gold include 10, 14, and 18. Jewelers typically stamp gold jewelry with the karat rating for identification and to show authenticity.
24 karat gold is also referred to as pure gold, which means that the gold has undergone no tampering. 24k gold is thus the purest form of gold available, containing 99.99% gold. It is a brilliant yellow, with an undeniable sheen.
So, why is 24k gold only 99.99% gold, not 100% gold?
100% gold is exceptionally soft, highly malleable, and fragile. It cannot hold its shape at room temperature. As a result, jewelers typically add a small amount of other metals like silver, copper, nickel, and palladium to enhance the composition of gold, making it strong enough to produce gold jewelry.
In contrast, 22k gold contains 22 parts gold, while 2 parts include other alloys like silver, zinc, and copper, making it harder, scratch-resistant, and more durable. These impurities make 22k gold more durable than 24k gold.
Since 22k gold is made of 91.67% pure gold, it also goes by the term 916 gold.
Which Gold Version is More Valuable?
Many people prefer 22k gold when it comes to jewelry because it endures wear and tears better than 24 karat gold which can break easily. Once you buy your jewelry, you only need to store it safely as gold does not tarnish.
Additionally, most serious investors intent on trading or handling their coins often opt for 22k gold coins because of their durability. These characteristics give 22k gold a higher resale value.
However, 24k gold is inherently more valuable than 22k gold, even at a similar weight. The only downside is that it scratches, bends, and breaks easier. It is a better investment option because of this higher value. If and when you sell your gold, 24k pieces will fetch more money than 22k options.
Another consideration is that lower-purity gold coins attract higher taxes in some countries. This makes 24k gold coins easier to ship internationally compared to 22k coins, which may be something you need to keep in mind when choosing which gold to invest in.
The Differences Between 24k and 22k Gold
Below is a table summarizing the key differences between 24k gold and 22k gold:
Brittle - scratches, bends, and breaks easily.
Hard, durable, and scratch-resistant
Ideal for investment
Ideal for jewelry and investment
Medical and electrical devices, religious pieces, special jewelry, gold coins, and gold bars
Making jewelry and gold coins
Brilliant yellow with a distinctive sheen
Yellow in color
Has the highest price
Lower than 24k gold
How to Invest in Gold
When buying 24k gold, whether coins, gold bars, or jewelry, you will first need to ensure that it is indeed 24 karat gold. To be confident that you’re buying authentic 24k gold, you should have a trusted jeweler test and appraise the pieces.
Additionally, keep in mind that while gold is an excellent long-term investment asset, it can be pretty volatile in the short term. If you’re looking for a short-term investment, gold may not be the right option for you.
Here are additional tips to keep in mind when you purchase or invest in gold:
- When investing in jewelry, go for stunning pieces since these are much easier to sell.
- Invest in the highest quality jewelry and ensure it bears a genuine stamp or hallmark certification to verify its purity.
- Do your research and keep a tab on market changes so that you can determine the best time to buy, sell, or hold gold.
- If you are looking to invest in gold, consider gold jewelry, ultimately moving on to gold coins, gold bars, or bullion.
Finally, it's important to note that there is another crucial factor other than the number of karats that influences the value of gold. When you purchase gold jewelry, your cost also includes making and wastage charges.
The making charges depend on the design you choose for your gold jewelry. However, when you are selling your 22k gold jewelry, the jewelers take neither the making charges nor wastages into account, so (barring a significant increase in gold prices), you’ll likely get a lower amount than you spent buying it.
Because of this, if you’re only looking to buy gold for investment purposes, it’s best to opt for gold coins or bars. These have minimal additional costs, unlike jewelry.
Which One Should You Invest In?
22k gold makes a superb investment instrument given its durability, but it's no match for 24k gold's high purity level. So, if you are considering investing in gold, go for 24k gold.
It provides a better option and will bring you significantly higher returns.