Gold alloys

Gold is an extremely soft and malleable noble metal when pure. Utilised for its beauty and corrosion resistance, gold is too soft in its pure form for many practical applications. It is therefore hardened by the addition of other metals, such as copper, silver, nickel, palladium and zinc. This combination of metals is called an alloy.

By making gold alloys, its durability and hardness is improved but its resistance to tarnishing is weakened, meaning a balance must be struck. The higher the proportion of other metals, the harder the alloy becomes, and each metal tints gold to various shades. Gold alloys are especially common in jewellery, where the maker will choose between the strength of the metal, the desired colour, and of course the cost.

Gold alloys will usually be quoted in terms of carats (parts per 24) or fineness (parts per 1000). Given the high value of gold, it is very important to have an accurate idea of how pure a gold alloy is.

A 9 carat knot pendant, crafted from yellow, rose, and white gold alloys. Available from The Fine Jewellery Company.

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Gold bars and ingots

As a raw material, pure 999.9% gold is supplied in the form of bars or ingots. These can then be alloyed with other metals for specific purposes.

Besides being a raw material, gold bullion bars and ingots are bought as a safe-haven store of wealth. Free from counterparty risk and easily traded, gold investments can diversify a portfolio and act as a hedge against risk in other investments. As they are not being used however, these items are generally not gold alloys, and are instead just pure gold. This makes calculating their value very simple.

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Gold purity

The purity of gold is generally measured in carats or fineness as mentioned above. Carats are parts of twenty four, 24 carat being pure gold. Fineness is measured in parts per thousand, with 999.9 being pure gold. Neither measurement gives indication of what other metal or metals have been used in the alloy, but often mints will disclose this.

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Gold coloured alloy

Zinc, copper, nickel, iron, cadmium, aluminium, silver, platinum and palladium are all common metals alloyed with gold.

Gold and copper are the only two coloured pure metals. Gold is yellow and copper is a reddish brown. All other metals are white or grey in colour but have various effects on the colour of gold alloys. A gold coloured alloy for jewellery will typically be one of three colours; yellow, white, or rose.

Depending on the alloy, gold appears in four basic shades: yellow gold, white gold, rose gold, and green. A huge range of other coloured golds are also possible, including grey, purple, blue and black, with blends between possible depending on the amounts used.

Yellow gold is the most popular and the shade most commonly thought of as being truly golden. It is an alloy of gold, silver, copper, and zinc. Because it is mixed with silver (another noble metal) it is hypo-allergenic, meaning it is unlikely to cause an allergic reaction. This also makes it very tarnish resistant.

White gold appears almost like silver or platinum. A very popular gold for jewellery, it is an alloy of gold and platinum or palladium. Parts of nickel and zinc may also be added. The hardness of platinum or palladium makes white gold extremely durable and scratch-resistant.

Rose gold gets its reddish tint from the inclusion of copper. Silver is also part of the alloy. The relatively low cost of both copper and silver make it a more affordable option.

Green gold is an alloy of gold, silver, and sometimes copper. The very subtle green tint is created by its silver content. It is the only naturally-occurring alloy. Found in the Earth's crust, with trace amounts of copper and other metals, it is termed electrum. Green gold can also be created with cadmium. This alloy, however, is toxic to the skin.

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Gold alloy coins

Before the 1930s, gold formed part of the composition of common currency coins, which today are sought after for coin collecting purposes. As these coins were handled in day to day trading and carried around in the pockets and purses of people pure gold would once again have been too soft. Instead, millions of gold alloy coins were minted around the world to produce strong coins that could be used for years without too much damage.

Since those times, refineries around the world continue to mint gold bullion coins with a legal tender face value for pure investment purposes. These values often act as a minimum guarantee price in the event of court action or financial settlements.

The legal tender value of these gold and silver coins is much less than the value in the physical metal they contain. Their true value is based on the metal, priced per ounce. However, being legal tender, they enjoy tax advantages over gold investment bars.

Some bullion coins are minted from pure 24-carat gold, such as the one ounce gold Britannia, which weighs 31.10 grams. There are however a number of gold alloy coins still produced today according to the old traditions. Their market price is based on the gold content and not the overall weight. This means that a one ounce gold Krugerrand, which is a 916.7 fineness gold alloy coin, will actually weigh more than one ounce. There is one ounce - 31.10g - of gold inside, as well as the additional weight of the alloying metal - copper in the case of the Krugerrand.

As pure gold bullion investments, coins act as a safe haven store of wealth and can diversify a portfolio. They are also free from counterparty risk of bank or government actions.