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Precious metals like gold and silver are excellent investments. Unlike most financial assets, they offer protection against inflation and don’t pose a risk to your credit. But what good is such an investment if you don’t know how to calculate its value?
You might have difficulty figuring out how traders measure gold if you’ve recently started investing and collecting gold and silver. Understanding Troy ounce vs ounce is the first step in getting started in this field. Even when dealing with small amounts of gold and silver, using the wrong unit of measure causes complications. In this article, we’ll take a closer look at the Troy ounce weighing system and how it varies from any other unit of measurement used today.
What Is a Troy Ounce?
You’ve probably heard of the term “Troy ounce” in advertisements or marketing materials for precious metals like silver and gold. Typically, individuals familiar with the Troy ounce have a thorough understanding of its role in determining the value of metals in the bullion industry.
A Troy ounce is a unit of weight commonly used to measure the mass of precious metals. Since medieval times, goldsmiths and other metalworkers have used the Troy weight system. Today, traders worldwide use Troy ounces when calculating the value of silver and gold bars or coins. The abbreviation for Troy ounces is “oz t.”
Due to their high value, precious metals are often bought and sold in large quantities and need a specialized measurement scale. Investors tend to use Troy ounces over regular ounces because the former offers more precision than the latter.
The Troy ounce is the only measurement unit used by the Troy weight system. This is the standard at sovereign and private mints because it ensures consistency in purity and weight. In addition to weighing precious metals, historically, manufacturers used Troy ounces to weigh gunpowder and pharmaceuticals.
What Is an Ounce?
An ounce, generally abbreviated as “oz,” is called an avoirdupois ounce, an American measurement of weight and mass. Imperial system measurements measure 28.3495 grams, 1/16th of a pound, or 437.5 grains.
Under the US system, we use avoirdupois ounces to calculate the weight of food and even postal packages. Fluid ounces measure the volume of liquids and drinks.
Troy Ounce vs. Ounce
Is a Troy ounce the same as a regular ounce? What are the main differences between a Troy ounce and an ounce?
Many people tend to conflate the two terms. It’s important to note that the Troy ounce differs from the units of measurement used in households. You can’t measure flour or milk in Troy ounces. Liquids and drinks served in bottles and cans also aren’t measurable by Troy ounces.
- Troy ounces and avoirdupois ounces measure different classes of items.
While avoirdupois ounces measure everyday household items and goods such as liquids, foods, and cooking ingredients, Troy ounces only measure silver and gold coins.
- Troy ounces are heavier.
The main difference between a Troy ounce and an avoirdupois ounce is the weight. A Troy ounce weighs more than a standard ounce. In imperial measurements, one Troy ounce weighs about 31.103 grams or 480 grams, making it about 10% heavier than one regular ounce (1 Troy oz = 1.097 avoirdupois ounces).
On the contrary, an ounce is 28.349 grams. The weight difference may seem minor on the surface, but the difference is especially noteworthy when a silver bar is sold or purchased in larger quantities.
- Measured differently.
Another distinction between Troy ounces and ounces is how they are measured. One ounce is equivalent to 1.16 pounds. Since a Troy ounce is heavier than a traditional ounce, you would assume that the same holds for pounds, correct? The truth is the Troy pounds are lighter than standard pounds. A Troy pound is 12 ounces, while 16 ounces equals a pound in the imperial system.
What Is the Origin of the Troy Ounce Weighing System?
Now that you fully understand the metrics involving the Troy ounce, it’s time to explore the historical aspects of this weighing system. The Troy ounce is just one of the units of measure that came from the Troy weighing system. There are several theories surrounding the origin of the Troy ounce, and there may be some truth to a lot of them. Top theories include:
- The name Troy originated from a popular town in France called Troyes. Troyes was the center of e-commerce during the 1200s. Bronze bars were commonly sold in this town. A pound was composed of 31.1 grams divided into 12 equal parts.
- Some believe that the term Troy comes from the French name Tresorerie de l’Hôtel des Monnaies (or the Treasury of the Hotel des Monnaies), which is the name of a French coin factory that established this system of measurements at its formation in Troyes, France.
- The Troy weighing system began to spread throughout Europe as trade grew. The primary unit of measure used during bullion transactions was the Troy ounce. The Troy ounce became the official measurement unit for gold and silver in France in 1828. The unit of measure also took front and center in the British coinage system.
- The Roman monetary system heavily influenced the Troy unit of measure. For centuries, the Troy ounce played a crucial role in shaping the commodities market.
Why Do Troy Ounces Matter?
Although avoirdupois ounces help determine the weights of household products and other goods, they are of little use when dealing with precious metals. Traders base the pricing of their bullion collections on the number of Troy ounces it contains. Because Troy ounces are the primary weighting system on the bullion market, you’ll need to become well-versed in calculating the weight of your precious metals.
The gold and silver Troy ounce are the most popular unit sizes. Besides its flexibility, it allows investors to track the performance of their bullion against the global market, which displays gold and silver in Troy ounces.
What should consumers beware of when buying gold and silver coins?
Sellers often try to falsely boost the value of their silver, gold, or bullion collection by listing its weight in traditional ounces rather than Troy ounces. For example, if a seller markets their bullion as weighing 100 ounces, the buyer will lose 10% of its actual value since it weighs 90 Troy ounces. Knowing the accurate weight of your collection also prevents you from undercharging when you’re selling your silver and gold.
What are other common gold measurements used in the bullion industry?
Some gold traders prefer to use pennyweights or grains when working with small quantities.
A pennyweight is 1/20 of Troy ounces or 1.55517384 grams. A grain is the smallest unit of measurement you can use to determine the weight of gold or silver. A grain is 0.0020833 Troy ounces.
How much is a Troy ounce of gold and silver worth?
The exact worth of gold and silver Troy ounce coins is constantly changing. The value of gold and silver fluctuates due to supply and demand. When demand increases, the prices of bullion follow suit. Often, gold and silver outperform each other on the market.
How big is one Troy ounce of gold?
A Troy ounce of gold is 31.1 grams or equivalent to 0.068 pounds. The feeling of holding a Troy ounce of gold is similar to that of holding a slice of bread. In cube form, the size of a Troy ounce of gold is comparable to a die.
What Should You Know About Buying Gold and Silver in Troy Ounces?
Although Troy ounces are the standard in the bullion industry, some countries prefer other systems. For instance, the United State Mint uses a modified version of avoirdupois ounces to weigh its gold and silver coins slightly heavier than a Troy ounce. A few countries have adopted systems similar to Troy ounces.
Many reputable auction and e-commerce platforms require that sellers use Troy ounces in their listings to avoid confusion. Sellers can miss out on a significant amount of money by referring to their bullion collection in standard ounces. In addition, companies that sell bullion engrave the weight and purity (metal content) in Troy ounces on their coins to eliminate any questions of the coin’s actual value. It can be hard to liquidate silver and gold coins that don’t have the purity and weight engraved on them.
Oxford Gold Group – Your Trusted Source for Gold and Silver Investments
Don’t fall victim to unverified dealers selling gold or silver in ounces rather than Troy ounces to appear like they are offering an irresistible deal. Being knowledgeable about Troy ounces vs. ounces is one way to avoid getting scammed. It’s best to purchase bullion products from reputable precious metals. The partners here at Oxford Gold Group have over 20 years of experience in gold and precious metal investment services. We help clients make well-informed investment decisions. Call us today to consult with one of our experts.