When you sell your gold, one of the most important things that affect its pricing is the weight. You can use a conventional kitchen scale that uses grams as the unit of measurement.
Gold prices are given in dollars per ounce but this is no ordinary ounce (also known as avoirdupois ounce) but troy ounces. There are a lot of financial publications that actually publish the gold price per gram instead of troy ounces but it is helpful to know how to convert between these two units of weight.
Gold isn’t the only precious metal that uses troy ounces as a unit of measurement, other precious metals that use the same unit are silver, platinum, palladium, and rhodium. The name “troyes” originated in France and has been used since the 16th century. A troy ounce is a unit of measurement that bullion traders have used for centuries to trade and make deals. It is the oldest measuring system used by buyers and sellers alike.
The term “gram” is derived from the word “gramma” which means “small weight”. This is exactly why grams are used – to measure small units of gold. A troy ounce is approximately equal to 28.35 grams. However, a troy ounce weighs approximately 31.1g.
The importance of differentiating between an ounce and a troy ounce
At first glance, there doesn’t seem to be that much of a difference between 28.35 grams and 31.1 grams. Why do you need to convert grams or avoirdupois ounce to a troy ounce when there is such a small difference between these units of measurement?
It’s gold – the smallest variation in the weight can affect the price. The gold price per gram is about $50-$60 but a troy ounce is priced at $1,700 – $1,800 depending on the current demand and supply. The difference between a regular ounce and a troy ounce is 2.75. The smallest variation in weight shift can mean getting or losing out on $100 when selling or buying gold. So, confusion over standard ounces and troy ounces can lead to actual loss of money.
Trading Gold
The great thing about gold bullion is that its weight is imprinted on the surface in grams and ounces. This will save you from doing complicated calculations. Remember that sometimes the measuring unit is based on the bullion’s country of origin. Countries that use the Imperial or Metric system of measurement like Australia will have the price of gold expressed in terms of grams. So, in these countries, people will refer to the gold price per gram and not per ounce as they do in the U.S.
Some Asian like India, Singapore, and Pakistan use the tola as a unit of measurement instead of grams; Japan and China use tael whilst Thailand uses baht. Most countries work with the metric system. If you want to sell your gold anywhere in the world, it is important to understand the conversions from ounces to grams and vice versa.
Although most people accept the troy ounce as a measuring unit for precious metals, there are some advantages to using the metric system or grams. First of all, a gram is a smaller unit than the troy ounce which means, it can be used to measure the tiniest of weights. It allows for greater precision in measuring furthermore it is more practical to express weight in whole numbers than in decimals as you would need to when measuring in troy ounces.