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Though technical and difficult, understanding karats is highly necessary in determining the value of gold available in the market. Karat, abbreviated as kt or K, refers to the unit of purity of gold alloys. The etymology of the word is derived from the mid-15th meaning carob seed or small horn, used to measure gold in ancient times.
In contrast to the carat of gemstones, karat is measured in 24 times pure mass divided by the total mass. In simpler terms, 24-karat gold is considered pure gold, while 18-karat gold is 18 parts and 6 part other metals. Similarly, 14-karat gold is 14 parts gold and 10 part other alloys and added fillers.
Carat, on the other hand, pertains to the diamond’s weight, not its actual size. To illustrate this point, it is said that each metric carat weighs 200 milligrams, and each carat is further subdivided into hundredths, or so points. Thus, a 75-point diamond weighs 0.75 carats, and a 50 –pointer has 0.50 carats, and so on.