Karats refers to the percentage of any jewelry piece that is made of gold. In American jewelry we use a 24 Karat system. The number before the Karat indicates how many parts, out of 24, are gold. For instance 18 Karat gold is 75% gold. In European Jewelry this is sometimes done with a three-digit number. 750 would mean 75%, and 999 would be the same as 24 Karat, indicating pure gold.