What is Fine Gold?

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As any metallurgical assayer will tell you, measuring the purity of gold is both an art form and a science. Knowing about fine gold is particularly important for numismatists, investors, and collectors, because this precious metal is a pivotal material when it comes to bullion and coinage.

What is Considered Fine Gold?

Fine gold is gold that is almost pure. Its purity is typically graded using a scale of millesimal fineness. This denotes the number of parts per thousand of pure metal in the alloy, according to its mass. This fineness is generally rounded to a three-figure number, with decimal places to follow where appropriate, especially where it’s used as a hallmark. For example, a fine gold piece which contains 99.9 percent gold would be labelled 999 or .999.

Note that the term “fine gold,” when it is not accompanied by a number, may be used to denote small flakes of gold or gold dust. These small gold particles receive this term because they are fine enough to pass through a sieve.

Purities of Fine Gold

There is some leeway regarding what constitutes fine gold. As 100% pure gold is virtually impossible to achieve, the purest type of gold currently commercially available is 999.99. This is sometimes referred to as five nines fine. The Royal Canadian Mint regularly produces commemorative coins from this fine gold.

Just below this is 999.9, or “four nines” fine. American Buffalo and Canadian Gold Maple Leaf coins are made from this fine gold.

Most commonly, fine gold is 999. This is the gold most commonly referred to as 24 karat gold, although technically 24 karat gold is 100% pure. However, as this is difficult to achieve outside of a lab environment, 999 gold is generally considered close enough. Gold manufacturers are legally allowed a half-karat tolerance in making gold products. Fine gold of this standard is also known as three nines fine. It’s seen in Chinese Panda coins, for example.

Below this is 995, the minimum amount allowed in Good Delivery gold bars. Two nines fine, or 990, is rarely seen, but still technically a type of fine gold. Beneath this is 986, also known as Ducat fineness. It is seen in historic coins hailing from Venetian and Holy Roman Empire mints, as well as modern Austrian and Hungarian coins.

Historically, 917 is the most widely used fineness for gold bullion coins. It’s currently used for American Gold Eagles, British Sovereigns, and South African Krugerrands. The least pure gold that is still considered fine gold has a 900 rating. These one nine fine coins are mostly used for Latin Monetary Union coins, such as the French and Swiss “Napoleon coin” 20 francs. It’s worth noting that while it’s not produced today, the Perth Mint in Australia did refine a 999.999 fine gold “plate” in 1957. This was the purest gold ever created in the commercial world.

While the millesimal fineness is one common way to express the purity of fine gold, a percentage, or per decimal, rating may also be used. For example, fine gold with a 999.9 millesimal fineness rating may also be expressed as 99.99% or .9999. The karat rating is not as common outside the jewelry world as it does not accurately express fineness.

What Type of Products are Usually Made with Fine Gold?

Fine gold is very soft, so it is generally not used to make jewelry and other everyday items. Instead, it is reserved for gold bullion bars and gold bullion coins. As these items are often used for investment purposes, the purity of their materials counts.

Process of Producing Fine Gold

Fine gold production begins with gold prospecting. Scientists search for areas where gold is highly concentrated. They obtain samples, which are analyzed for their gold content. If the gold is pure enough, mining commences. Miners may use open-pit techniques, underground mining methods, or pan for the gold, depending on where the deposits are located.

Once the gold-bearing rock is obtained, the gold must be extracted from it. The rock is broken down into small pieces before being ground down to a fine powder or slurry. This is thickened with water and run through leaching tanks. The gold adheres to small carbon grains introduced to the tanks and is filtered from the ore. The carbon is then separated from the gold using a hot, caustic solution.

The gold solution is then ready for electrowinning, a process that extracts the gold from the leaching chemicals. The solution is poured into a cell, where it receives a strong electrical current. The gold gathers on the cell’s negative terminals.

The negative terminals are melted at around 2,100 degrees Fahrenheit in a process known as smelting. A chemical mix, known as flux, is then added to the molten material. The flux helps separate the gold from the metal used to make the negative terminals. The flux is poured off, followed by the almost-pure gold, which is set in molds. The resulting gold bars, known as “dore bars,” are then sent to refineries for further processing.

Refining is the final part of fine gold production. This vital step removes the majority of the impurities that remain in the gold. Refiners melt down the dore bars and scrap gold in a furnace. Borax and soda ash are added to the mix to separate the pure gold from other metals in the compound. A sample of the mixture is taken to a laboratory where its gold content is confirmed. The refined gold is then cast into bars for use by mints and other gold manufacturers.

Why is Fine Gold Used in Bullion?

Fine gold is a popular bullion material, because it’s so valuable. As the gold has little to no impurities, there’s nothing in the metal to drive down its price. Because the metal is nearly 100% pure, it can also be more directly associated with the current gold spot price, making it easier to derive a value on the market.

Bullion is also not handled as much as jewelry and other items made with less pure gold, so its softness is not an issue. Some gold suppliers actually store gold for their clients, who never actually physically lay their hands on the bullion. Investors and collectors who prefer to keep their bullion close by are still aware of the fragility of the material and rarely touch their pieces.

An understanding of fine gold, including the way it’s made and used, can help investors and collectors make more informed buying decisions. Browse JM Bullion’s wide selection of fine gold bullion, and find the perfect fine gold piece for your collection or portfolio today.

All Market Updates are provided as a third party analysis and do not necessarily reflect the explicit views of JM Bullion Inc. and should not be construed as financial advice.