What is a Carat?

In English, carat sounds the same as carrot, but we aren’t discussing vegetables. Carat also sounds the same as karat, but that’s a measure of the fineness of gold or the ratio of pure gold to alloy metals in a mixture. Karat is abbreviated as “K,” while carat is abbreviated as “ct.”

One carat equals 1/5th of a gram or 200 milligrams. You could also phrase that as five carats in a gram. A kilogram is 1,000 grams, or 5,000 carats. (My apologies to those of you on the metric system. To Americans, this sometimes needs to be explained).

Gem weights are occasionally expressed in common fractions like ½ or ¼ carats but are more commonly expressed as decimal fractions. (0.25 carats instead of ¼ carats, for example).

A carat is further divided into units called points. There are 100 points in a carat. So, for example, 25 points, 0.25 carats, and ¼ carats are all the same weight.

Carats, Gem Value, and the Law of Supply and Demand

To understand how carats affect a gemstone’s grade, you have to reflect on the law of supply and demand. Value is always a relationship between the demand…