Coveted for centuries, this gold has been a symbol of wealth, power, and stability across a number of cultures and civilizations. Whether adorned as jewellery or stored as bars or biscuits, gold has remained a popular asset for investors who want to preserve and grow their wealth over time. However, before investing in this precious metal, it is crucial to understand your needs and the reason behind buying gold. Whether you want to buy gold just to sell it later, to avail a gold loan or to make jewellery, there are different types of gold caratavailable for each purpose.
What is Carat?
Before delving into what is 22 or 24 carat gold, it is important to understand what is meant by “carat”. Carat, not to be confused with the unit of weight for gemstones, refers to the proportion of pure gold in a given alloy. The more is the value of Karat, the purer is the gold. Its measurement is done on a scale of 0-24. Thus, the purest form of gold is 24k carat gold. It is composed of 99.9% gold, making it the highest level of purity attainable.
However, due to its softness and susceptibility to damage, pure gold is often alloyed with other metals to enhance its durability and strength. This mixing lowers its purity percentage, making it 22 carat gold or 18 carat gold and so on.
22 Carat vs. 24 Carat Gold
The purity of gold is measured on a scale of 24, with each carat representing 1/24th of the total weight. Therefore, 22 carat gold consists of 22 parts gold and 2 parts other metals, while 24 carat gold is entirely pure. This distinction has significant implications for both the physical properties and investment potential of each type of gold.
Uses of 22 Carat Gold
22 carat gold, with its alloy composition, is more durable and less prone to scratches or deformities compared to 24 carat gold. However, the presence of additional metals dilutes the purity of 22 carat gold, affecting its intrinsic value as an investment asset so you may get a lower value for your gold loan. Here are some popular uses of this type of gold carat:
- 22 carat gold is particularly well-suited for jewellery and other decorative purposes where strength and resilience are paramount.
- It is also tarnish resistant which means that it shines and stays in its original form for a long time.
- Since it has a lower price, it is accessible to more people.
Uses of 24 Carat Gold
24 carat gold, on the other hand, is free from any impurities or alloying elements, 24 carat gold retains its intrinsic value and liquidity, making it an attractive option for those seeking to preserve wealth in its purest form.
- Apart from jewellery, 24 carat gold is usually used in medical and electrical equipment.
- Due to its purity, this carat of gold is characterised by a rich yellow hue, making it highly attractive.
- It is the most expensive type of gold available.
While 24 carat gold may be more susceptible to damage due to its softness, its unparalleled purity ensures universal recognition and acceptance in the global market.
Choosing the Right Gold for Investment
When considering which type of gold is better for investment, several factors come into play. While 22 carat gold may offer greater durability and versatility in terms of applications, the lower purity percentage of 22 carat gold makes it less valuable as a long-term investment choice.
Conversely, 24 carat gold, though more susceptible to damage, maintains its intrinsic value and liquidity. So the rate of your pure 24 carat gold today is likely to significantly increase over time, making it an excellent choice for wealth preservation and capital appreciation.
Suggested Read: DIFFERENCE BETWEEN 22K AND 24K GOLD
Using Gold Loan as a Way to Finance Your Immediate Needs
When it comes to choosing the type of gold best suited for a gold loan, 24 carat gold is an excellent option. Due to its purity, 24 carat gold commands a higher value in the market, which translates to a higher loan amount when used as collateral for a gold loan.Gold loans provide an excellent solution for meeting immediate financial needs without the hassle of extensive paperwork or credit checks.
By pledging gold as collateral, borrowers can secure quick access to funds for various purposes, including emergencies, medical expenses, education, or business investments. Unlike traditional loans, gold loans offer flexibility in repayment terms and typically carry lower interest rates, making them an attractive option if you are seeking short-term financing solutions.
With a legacy spanning decades, Muthoot Finance has earned a reputation for offering transparent and reliable gold loan solutions tailored to meet the diverse needs of all customers. With its extensive network of branches and loan-at-home services, Muthoot Finance ensures seamless and hassle-free loan processing.
