Gold Karats Explained
A karat (abbreviated K or kt) is the unit used to measure the purity of gold. Pure gold is 24 karats (24K). Most jewellery uses an alloy — a mixture of gold with other metals — to improve durability and manage cost.
| Karat |
Purity |
|
Gold Content |
Common Use |
| 24K |
99.9% |
|
24/24 parts gold |
Investment bars & coins, electronics |
| 22K |
91.7% |
|
22/24 parts gold |
Gulf jewellery, bridal gold (UAE, SA) |
| 21K |
87.5% |
|
21/24 parts gold |
Levant & Egyptian jewellery |
| 18K |
75.0% |
|
18/24 parts gold |
Fine jewellery, diamond settings |
| 14K |
58.3% |
|
14/24 parts gold |
Western jewellery, fashion pieces |
| 9K |
37.5% |
|
9/24 parts gold |
UK & Australian budget jewellery |
Why does karat matter?
Higher karat gold is softer and more vibrant yellow in color, but scratches more easily. Lower karat alloys are harder, more durable, and can be tinted white, rose, or green depending on the metals added (silver, copper, palladium). The price you pay is directly proportional to the gold content.
Price Formula
Gold price per gram = (XAU/USD spot price ÷ 31.1035) × (karat ÷ 24) × FX rate
How Gold Prices Work
The gold price you see quoted globally is the spot price — the current market price for immediate delivery of one troy ounce (31.1035 grams) of 99.9% pure gold, denominated in US Dollars (XAU/USD).
Where is the price set?
Gold trades 24 hours a day on global markets. The two primary venues are:
- COMEX (New York): The world's largest futures exchange for gold. COMEX prices drive global sentiment.
- LBMA (London): The London Bullion Market Association sets a twice-daily benchmark called the London Gold Fix, used as the reference for physical gold contracts worldwide.
- OTC Markets: Over-the-counter 24-hour trading between banks, refineries, and dealers accounts for the bulk of daily gold volume.
What moves the price?
- US Dollar strength: Gold is priced in USD. A stronger dollar makes gold more expensive for foreign buyers, reducing demand and pushing the price down — and vice versa.
- Interest rates: Higher interest rates increase the "opportunity cost" of holding gold (which pays no yield), pushing prices down. Rate cuts tend to boost gold.
- Inflation: Gold is a traditional inflation hedge. Rising inflation expectations often push gold prices up.
- Geopolitical risk: Wars, sanctions, and political instability drive investors to gold as a safe haven.
- Central bank buying: Central banks — especially in emerging markets — have been net buyers of gold since 2010, supporting prices.
- Jewellery demand: India and China account for over 50% of global gold jewellery demand. Seasonal festivals (Diwali, Chinese New Year) create demand spikes.
Our Price Data
We fetch the XAU/USD spot rate from gold-api.com every 90 seconds. Exchange rates come from open.er-api.com. All prices shown are estimates — retail prices include additional charges.
The AED–USD Fixed Peg
The UAE Dirham (AED) has been fixed at exactly 3.6725 AED per US Dollar since November 1997, when the UAE Central Bank officially pegged the currency. This means:
- AED gold prices move in perfect proportion to USD gold prices.
- There is no exchange rate risk for UAE residents holding USD-denominated assets.
- No currency conversion uncertainty — the rate never changes.
This peg is maintained by the UAE Central Bank through direct market intervention whenever needed. The Bank holds substantial USD reserves (estimated at over $130 billion via the Abu Dhabi Investment Authority) to sustain it indefinitely.
On this site, we never use a third-party exchange rate for AED. We hardcode the official peg rate of 3.6725 to ensure accuracy and consistency.
Zakat on Gold
Zakat is one of the Five Pillars of Islam — a mandatory annual charitable contribution for Muslims who hold wealth above the nisab threshold for a full Islamic lunar year (hawl).
The Nisab Threshold
The gold nisab is 85 grams of 24K (pure) gold. If you own gold worth 85 grams or more of pure gold for a full lunar year, Zakat becomes obligatory.
The Zakat Rate
The Zakat rate on gold is 2.5% of the total value of your gold holdings.
What counts?
- All gold jewellery intended for investment or storage (not for regular personal use — scholars differ on this).
- Gold bars, coins, and ETFs.
- Gold held at a bank or in a vault.
Use Our Zakat Calculator
Our Gold Calculator includes a Zakat calculator that computes your obligation based on today's live gold price. Always consult a qualified scholar for your specific situation.
Gold Hallmarking
A hallmark is an official stamp applied to a gold article after independent testing (assay) to certify its purity. Without a hallmark, you cannot be certain of the karat claimed by a seller.
UAE Hallmarking
The Emirates Authority for Standardization and Metrology (ESMA) oversees gold hallmarking in the UAE. Hallmarked gold in the UAE shows the Emirates Quality Mark alongside the karat stamp (e.g., 916 for 22K, meaning 91.6% purity).
India — BIS Hallmarking
The Bureau of Indian Standards (BIS) mandates hallmarking for all gold jewellery sold in India (BIS Act 2016). A BIS hallmark includes the BIS logo, purity in parts per thousand (e.g., 916 for 22K), and the jeweller's unique identification number (HUID).
UK Hallmarking
UK hallmarking is among the world's oldest and strictest. UK assay offices stamp articles with the maker's mark, the purity (e.g., 750 for 18K), the assay office mark, and optionally the year letter.
| Millesimal fineness |
Karat equivalent |
Purity |
| 999 | 24K | 99.9% |
| 916 | 22K | 91.7% |
| 875 | 21K | 87.5% |
| 750 | 18K | 75.0% |
| 583 | 14K | 58.3% |
| 375 | 9K | 37.5% |
Frequently Asked Questions
What is a karat in gold?
A karat (K or kt) is a unit measuring gold purity. 24 karat is pure gold (99.9%). 22K is 91.7% gold, 21K is 87.5%, 18K is 75%, and 14K is 58.3%. The remaining percentage is other metals like silver, copper, or palladium.
Why is the UAE Dirham pegged to the US Dollar?
The UAE Central Bank has maintained a fixed exchange rate of 3.6725 AED per USD since 1997. This peg provides monetary stability, eliminates exchange rate uncertainty for businesses and investors, and is backed by the UAE's substantial USD oil revenues and reserves.
How is the global gold price determined?
The gold spot price (XAU/USD) is determined on global commodities markets — primarily COMEX in New York and the London OTC market. The London Bullion Market Association (LBMA) sets a twice-daily benchmark price called the London Gold Fix, used as the reference for physical gold contracts worldwide.
What is the difference between spot price and retail price?
The spot price is the raw market price for pure gold. When you buy jewellery or coins from a retailer, you pay the spot equivalent plus: making/fabrication charges (typically 3–25 AED per gram for jewellery), a dealer margin (1–5%), and any applicable taxes (VAT, import duties). Investment-grade bars from reputable dealers have smaller premiums (0.5–3% over spot).
Is our data real-time?
We fetch gold prices every 90 seconds from gold-api.com and exchange rates from open.er-api.com. This provides near-real-time data, but there may be a slight lag versus institutional trading platforms. The prices shown are estimates based on this data and are suitable for reference purposes, not for executing trades.
What is a troy ounce?
A troy ounce (ozt) is the standard unit for gold pricing. It equals 31.1035 grams — slightly heavier than a regular (avoirdupois) ounce (28.35 grams). All international gold prices quoted in "per ounce" refer to troy ounces.