Speak With A Specialist Today, Call: (866)342-4259
A troy ounce is the standard unit of measurement used in the precious metals market — and the price of gold, silver, platinum, and palladium is usually expressed in troy ounces.
First-time investors would be forgiven for thinking it’s the same as a “regular” ounce, but that’s not true. This guide is devoted to getting you up-to-date on everything you need to know.
So, What Is a Troy Ounce?
The ounces commonly used in everyday life are so-called avoirdupois ounces, which are abbreviated to “oz.” They are not quite equivalent to troy ounces, used primarily in the precious metals industry and usually abbreviated as “ozt”:
In other words, the troy ounce is significantly heavier than a regular ounce, a fact that often surprises first-time precious metals investors.
Troy ounces can also be broken down further. One troy ounce is equal to 20 pennyweights. Pennyweights are abbreviated to “dwt,” which stands for “denarius weight” and refers to Roman coins. Each pennyweight is further divided into 24 grains.
Being familiar with troy ounces, pennyweights, and grains is essential for anyone keeping an eye on the precious metals market, and it’s crucial not to confuse troy ounces and the avoirdupois ounces more commonly used in daily life.
Where Does the Name ‘Troy Ounce’ Come From?
The exact origins of the troy ounce aren’t entirely clear, leaving plenty of room for excited speculation.
However, many historians believe that this unit of measurement came from the Roman Empire. That’s because Ancient Rome used a very similar system — the Latin word “uncia” referred to a 12th part. This was later adopted into the French language as “once,” eventually leading to the English word “ounce.”
Most people believe that the term “troy ounce” can be traced back to the French town of Troyes. Troyes was a key trading station in the 15th century, especially in the silver market, because it also manufactured silver.
This system became commonplace in Europe over time, and the British Empire officially recognized it in 1527. Like other units of measurement that remain in daily use today, it never lost popularity and has since spread across the globe.
In the modern era, the troy ounce is the standard unit used in the precious metals market. When buying gold and silver coins, “one-ounce” coins are typically equivalent to a troy ounce rather than a regular ounce.
Why Should Investors Be Familiar with Troy Ounces?
The troy ounce is the standard unit of measurement in the precious metals market. It is, as such, impossible to keep an eye on the price of precious metals like gold, silver, platinum, and palladium without understanding the troy ounce.
The market price of precious metals is usually listed per troy ounce. Likewise, the price of precious metals you may be thinking of buying is expressed using this unit of measurement. You may come across gold bars with weights of “10 troy ounces,” for example, or gold coins of “one troy ounce.”
Not all prices are based on the troy ounce, however, and it is also not uncommon to see prices expressed in kilograms.
It is essential for investors to be familiar with the units of measurement used to describe the weight of precious metals. This basic knowledge allows you to understand what you’re getting. By the same token, investors looking for third-party storage vaults should know that the weights being discussed usually refer to troy ounces.
Why Troy Ounces Matter: A Recap
Troy ounces are heavier than the regular or avoirdupois ounces (oz) used in most other contexts. While one troy ounce is approximately equivalent to 31.1035 grams, a normal ounce is 28.3495 grams.
The market prices of precious metals are expressed in this way, making familiarity with the troy ounce a must for casual and serious investors alike. Investors should, meanwhile, remember that premiums may be charged to cover the costs associated with refining and distributing precious metals.