How is Gold 'Fineness' Calculated?

If you have ever purchased a bar of gold, you will notice that the bar's 'fineness' is located on the front of the bar. What exactly does this mean, and how is it calculated? When a gold bar is minted, the gold is not 100% pure. A small portion of the metal in the bar is silver, copper, or other metals. This is done to improve the durability of the bar (as gold is quite soft and can be easily damaged). However, international standards state that for a gold bar to be classed as investment grade, it must have a minimum fineness of 999. The fineness of a gold bar, therefore, refers to how much of the gold bar is made up of other amalgamated metals. 

How is Gold Fineness Calculated?

In order to calculate the fineness of a gold bar, the gold bar's purity is multiplied by its gross weight. For example, if a 1 Kilogram gold bar (1000 gram gold bar) is 999 fine, this means that 999 grams of the bar's weight are pure gold, and only 1 gram is other amalgamated metals. 

For retail investors into bullion, it should be noted that the standards of fineness are so high for investment-grade gold bars, that whether a bar is 999 fine or 9999 fine does not really impact its price.