Gold Chains: How much is a karat?
Often confused with carats, which is a way to measure the weight of precious gems like diamonds, karats are a way to determine how pure gold is.
These two words are frequently confused because they are basically the same word with two different meanings. A carat is a weight that equals about 0.2 grams. So the size of a diamond, or the amount of carats, is only determined by weight. This is obvious when you think that all diamonds should be pure diamonds, just differing in size (not composition).
On the other hand, gold can be melted and combined with other alloys in order to give it properties not inherent to gold, such as strength and durability. So gold is measured not only by weight (usually in grams), but by purity.
It is believed that the standard karats for pure gold came from Germany, where a pure gold coin, called a mark, weighed about 24 carats (this would be about 4.8 grams). By assimilation the accepted value for pure gold was 24 karats. Once you begin adding other metals to the gold, its karat-value decreases.
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Source: How Stuff Works