Fineness in gold trading
Fineness states gold purity in parts per thousand: 999.9 is 99.99% pure; bullion bars and coins are stamped with it, and the gold price applies to fine content.
Also called Purity, Millesimal fineness, 999.9 fine
Fineness expresses purity as parts of gold per thousand parts of metal. A bar stamped 999.9 is 99.99% gold, sometimes called “four nines”. The LBMA Good Delivery standard requires a minimum fineness of 995 for large bars; most retail investment bars and modern bullion coins are 999 or 999.9; 22-karat coins such as the sovereign are 916.7. Fineness and karat describe the same thing on different scales: 24K ≈ 999, 22K = 916.7, 18K = 750.
How it applies to gold trading
Every published gold price is for fine gold. A 1-kilogram bar at 999.9 fineness contains 999.9 grams of gold and is valued at that weight times the price per gram; a 995 bar contains 995 grams. The difference is small on a bar but matters in settlement: London good-delivery bars are weighed and assayed, and the invoice is for fine ounces, not gross ounces.
For a trader reading physical-market data, fineness explains why a 400-ounce London bar may be invoiced as 398 fine ounces, and why some coins trade at a different premium from others of the same gross weight.
Refiners on the LBMA Good Delivery List are audited for assay accuracy, which is why bars carrying their marks trade at lower premiums than bars of uncertain origin, even at the same stamped fineness.
A common mistake
Treating gross weight as gold content. A 10-gram 916 ornament contains 9.16 grams of gold; valuing it at 10 grams overstates it by 9%.
See also: Karat, Bullion, LBMA, Coin premium.
Frequently asked questions
What does 999.9 mean on a gold bar?
That the bar is 99.99% pure gold. The stamp usually appears with the refiner’s mark, the weight and a serial number.
What fineness is required for a London good-delivery bar?
A minimum of 995 parts per thousand, with a gold content between 350 and 430 fine troy ounces, under the LBMA’s Good Delivery rules.