The Troy ounce, what is the unit of measurement used on the gold market?
The troy ounce is the unit of measurement essential for the investment in physical gold. Came straight of the Middle Ages, yet they are essential to international trade in this sector.
The origins of the troy ounce.
The name of an ounce of gold “Troy” comes from the French city of Troyes. Now located in the Great Is, formerly Champagne, the place was famous for its fairs and market days. It is in these times that was used, “ounce-troy” for weighing gold, but also silver or spices. Today, the fairs of Champagne, it only remains that this unit widely taken up by the british.
In the puzzle of the units of measurement, medieval, “the ounce troy” (pronounced ” troï “) and its abbreviation “oz t” a simplified to trade. In the Bronze Age, the weighings were made on the weight of a grain of a cereal (as wheat or barley, for example). The Middle Ages referred to this unit of measure to create the troy ounce. The plants that produce grain with different weights, it was necessary to set the weight of the grain once and for all. Thus, since 1959, there are 5 760 grains in a pound Troy.
Thus, one ounce corresponds exactly to 31,1034768 grams. This number is obtained by dividing by 12 ounces to the pound troy (” lb t “, that is, 373,2417216 grams), again in force since the Middle Ages.
Nowadays, it has established itself as the key value, and the stock market refer to it constantly, giving the current spot of a gold ounce troy.
The troy ounce, a must have in the sector of gold investment
In the sector of the investment pieces, the pieces evoke their purity, but also their gold content. Thus, without taking account of its purity, a piece of an ounce of gold contains precisely 31,1034768 grams of metal that is precious.
The same goes for gold bullion. If for a long time, the ingots were packed in bars of a kilo, they are now available in formats that are more modest and more accessible to small investors. However, these formats are often very similar to the format of an ounce. Thus, they can find pellets to an ounce or 10 ounces (about 311 grams of gold), for example. Conversely, it is also possible to find ingots of 400 ounces or 12,441 pounds of gold.
The gold coins use often of the alloys so that if they contain an ounce of gold, this amount is actually added to other materials. In contrast, the ingots are always of pure gold, containing at least 995‰: their buyer does, therefore, nothing else than an ounce of gold.
A few organizations have shown their willingness to detach themselves from the system of the ounce. This is the case of the official currency of China, which knocks since 1982, the Panda. This gold coin does not contain an ounce, but exactly 30 grams of precious metal. The commitment announced by the agency was to move closer to a system of weight used more in his country.
In spite of everything, these cases remain anecdotal, and the ounce of gold troy should stay for a long time, the main unit of measurement of the gold market.
Why the troy ounce is important
It is the systematic use of the gold ounce troy, which is its strength. The unit of measure is used as a reference everywhere in the world, it facilitates the transaction. All of the countries included in this market are thus of bullion to the weight similar. In addition, this simplifies the investment. For the gold bullion, the buyer does not need is the spot to find out the value of his property, either in dollars, euros or any other currency. It must simply refer to the current situation of the spot. This reduces the number of necessary conversions.
The troy ounce is now specific to the precious metals market. In other sectors, other types of ounces are used, such as the ounce “avoirdupois,” which is used for example to the weighing of the sugar.
Investors must ensure they buy an ounce of gold troy. The precious metals market retained the monopoly of this unit of measurement because its weight in grams is slightly higher (about 10%) to that of an ounce ” avoirdupois “. However, this difference is important: imagine that you have bought an ingot of 100 ounces. Sell 100 ounces of gold in troy, you will see that in reality, you had bought that 91,15 ounces of gold in troy. This gap increases exponentially, especially in the case of the bars are “Good Delivery” by the LBMA and their 400 ounces. We must, therefore, be wary of dealers suggesting bullion based on other ounces.