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What’s The Difference Between 22 Karat And 24 Karat Bullion?

Pure gold is 24 karats. As a practical matter it is very difficult to refine production coins to perfection. Thus the highest gold purity in gold bullion coins is typically 99.99%, which is read as .9999 fineness. Pure gold is a very soft metal making it easy to work with but easy to deform with pressure. The difference between 22 karat and 24 karat bullion coins is the addition of 2 parts per 24 of an alloy such as copper to strengthen the gold bullion coin.

The American Eagle and the Krugerrand are 22 karat gold coins. These coins are tougher and, potentially more wear resistant, than coins such as the .9999 fine American Buffalo or Canadian Maple Leaf. This was a real issue with the Krugerrand which was originally meant to circulate as a gold bullion coin. For the American Eagle, which is solely intended as a means of owning gold bullion, it probably does not make any difference.

The reverse sides of an American Eagle and Krugerrand state “1 oz. Fine Gold” and “Fyngoud 1 oz Fine Gold” respectively. This is the total gold content of the coin. The weight of each coin is greater than an ounce because of its alloy content.

The only alloy in the Krugerrand is copper. This 22 to 2 mix of gold and copper is called “Crown Gold” after its use in British Gold Sovereigns. The use of copper makes the coin somewhat more red and creates a harder alloy than many other metals. The American Eagle uses a copper-silver alloy. Using less copper gives the American Eagle less of a reddish cast than the Krugerrand. Although silver as an alloy lightens gold there is not enough in the American Eagle to create the “white gold” appearance seen in some jewelry.

Some investors mistakenly believe that coins like the American Eagle are an ounce and that the gold content is less. This is not true. The American Eagle is guaranteed by the United States government to contain exactly one ounce of gold. The difference between 22 karat and 24 karat bullion has to do with strength of the coin, not the gold content.

For more information on gold bullion coins read the sources listed below. To speak with one of our gold experts please call 1-800-300-0715.


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