The Troy Ounce

by | Dec 18, 2020 | Blog

The troy weight units of measurement likely take its name from the market town, Troyes, in France, 1 troy ounce is equal to 31.1034768 grams, according to The Royal Mint of the United Kingdom. The troy ounce remains the standard unit of measurement in the precious metals market.

What Is a Troy Ounce?

Troy weight can be traced back to trade in the 9th century France, where English merchants described the weight of a platter traded in the French town of Troyes. However, the exact etymology of the weight is unknown, as a reference in a ledger from 1307 also contains a translation of the word “troi”, which meant balance.

What is certain is that the Troy weight system is closely related to that of the Roman monetary system. The Romans used bronze bars of varying weights as currency.

  • An aes grave, or heavy bronze, weighed 1 pound
  • 1/12 of an aes grave was called an uncia, or an ounce, in English

Various regions of Europe adopted their own troy weight systems, including the Holland troy and the Paris troy, which had values varying by up to several percentage points. In 5727, England made the troy weight system its official measure for gold and silver, which remained in place up until 1824 when the crown introduced the British Imperial system of weights and measures.

The sanctioning of the measure by the UK crown meant that the measure became standardized, and much of the world’s precious metals are measured using this metric today, with China being the exception, as gold in the region is measured in Chinese Gold Panda’s, a bullion coinage introduced in 1982.

The troy ounce – often abbreviated as “t oz” or “oz t” – used today is essentially the same as the British Imperial troy ounce, which was adopted as an official weight standard for United States coinage by Act of Congress on May 19, 1828. The British Imperial troy ounce was officially adopted for coinage in 1527, making the beginnings of standardized measures for precious metals, and later coins, in the European region. The system was used to measure more than just metals and had applications in medicine, food storage, and materials.

The only troy weight still in use is the British Imperial troy ounce and its American counterpart. Both are based on a grain of 0.06479891 grams (exact, by definition), with 480 grains to a troy ounce (compared with ​437 1⁄2 grains for an ounce avoirdupois – which means “goods of weight” and was formally used to weigh precious metal and non-precious metal items). While the British Empire abolished the 12-ounce troy pound in the 19th century, it is still sometimes used in the American system.

The troy ounce continues to be the standard unit of measurement in the precious metals market to ensure purity standards and other common measures remain consistent.

  • The troy ounce is the equivalent of 31.1034768 grams, whereas the ounce is the equivalent of 28.349 grams
  • A troy pound (12 troy ounces) is lighter than a standard pound (14.6 troy ounces)

The avoirdupois ounce, or the ounce (oz), is a metric commonly used in the US to measure foods and other items, but not precious metals. It is the equivalent of 28.349 grams or 437.5 grains. A troy ounce is a little heavier, with a gram equivalent of 31.1 grams. The difference is just 2.751 grams, but this can add up to a substantial amount in large quantities.

When gold is trading at US$1,887/ounce, the ounce measurement is a troy ounce.

  • A troy ounce is heavier than a standard ounce, there are 14.6 troy ounces — compared to 16 standard ounces — in one pound.
  • This pound is not to be confused with a troy pound, which is lighter and is made up of 12-troy ounces.

For those wanting to invest in precious metals and trading, it is important to understand these metrics. There are a few other terms that can be very useful to the market newcomer.

Hundredweight (Cwt)

Formerly also known as the centum weight or quintal, the hundredweight is a British imperial and US customary unit of weight or mass. In North America, a hundredweight is equal to 100 pounds; in the United Kingdom, a hundredweight is 112 pounds. It has largely been replaced by units of kilograms.

Precious Metals 

Precious metals are rare metals that have a high economic value, such as gold, silver, and platinum. Each has an ISO 4217 currency code.

Demurrage 

Demurrage fees are the fees paid by freighters for delays in loading or unloading freight.

Concerning currencies and commodities, demurrage refers to the costs of holding those assets.

New York Mercantile Exchange (NYMEX)

The New York Mercantile Exchange is a commodity futures exchange owned and operated by CME Group of Chicago. It is the world’s largest physical commodity futures exchange.

Vault Receipt

A vault receipt, or a warehouse receipt, is your guarantee that a seller will deliver commodities to a certain warehouse for storage. A vault receipt is commonly used to settle a precious metals futures contract, in place of actual delivery.

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