The troy-ounce is a unique weight used for precious metals and precious stones. This is based on 12 pounds to the pound instead of the traditional 16 ounces, meaning that a troy-ounce of actual weight is more than the standard ounce. A troy-ounce is 31.1034768 grams or 0.0311034768 kilograms.
History of Troy-ounce
The term “troy-ounce” is believed to come from a unit of measurement first used in the Middle Ages in Troyes, France, which was used by traveling merchants as a measure of exchange. In the 15th and 16th centuries, European countries like England and France made the troy-ounce their standard unit of measurement. While countries around the world today use different systems for measuring weight – most use the metric system, the troy-ounce became the international standard for measuring precious metals in most countries.
When are troy-ounces used?
Most countries in the world use grams and kilograms as standard weight measurements. This system of measure avoirdupois system is still used only in the United States. Here, it is not only a standard of measurement for items such as flour, cloth, and other dry materials, but is also used as a standard unit of measurement for all weights except gold, precious metals, and precious stones. The troy-ounce is used exclusively as a standard measure of gold, silver, and other precious metals around the world, and is the only unit in its system of measurement that is still in common use today.
Is a troy-ounce lighter or heavier than a standard ounce?
A troy-ounce is heavier than a standard US (avoirdupois) ounce. It is about 9.7% heavier than the avoirdupois ounce.
How much is a troy-ounce of gold?
In terms of weight, the troy-ounce does not change over time. However,the price of gold fluctuates, meaning that there is no fixed price per troy-ounce of gold. Depending on various market factors and/or conditions, a troy-ounce of gold can cost more or less each day. In August 2020, gold reached a high of $2,072.49 per troy-ounce of gold. Note: This spot gold price is still written as $2,072.49/oz because imperial ounces use the same abbreviation troy-ounces use the same abbreviation. However, in the bullion market, any reference to an ounce is understood to refer to a troy-ounce.
Why are troy-ounces important?
The precious metals industry has many branches, including discovery, production and trade. To maintain consistency across sectors, such as international borders, a standard weight measurement of gold and other precious metals is essential. Part of this consistency has to do with the historical prices of gold and other precious metals. As the troy-ounce has historically been used, continued use of the sector will help maintain a sense of sustainability and track thegold priceover the long term.
When buying gold, precious metals or other precious metals, it is important to remember that they are measured in troy-ounces and to know how convert between units of measurement. While the shared abbreviation “oz.” commonly used, the price of each is given in troy-ounces, not standard ounces. Buying gold at the “spot price” means buying it at the current market price. The price of gold, silver and other precious metals fluctuates throughout the day, so the spot price at any given minute may differ from the average price at the end of each day.
Understand your next precious metal purchase
Understanding what a troy-ounce is and why it is used in the gold and precious metals industry can help take the confusion out of trying to enter the world of physically holding precious metals.