Informational Article

Cost of Gold Per Ounce

Precious metals such as gold and silver are sold based on weight. Oftentimes these metals are referred to as being worth a certain dollar amount per ounce. This weight, however, is likely to be based on something known as a troy ounce versus a regular common ounce that is used in so many other weighting systems today. It is important to understand the difference between the two types of ounces, as well as to be sure of which unit of measurement is being quoted, because it does make a difference in the cost of gold.

The current cost of gold per ounce can be found by clicking here.

Ounce Vs Troy Ounce

An ounce is simply defined as a unit of measurement that is used in the U.S. Customary system. When someone refers to an item weighing a certain amount in ounces, it is likely that they are referring to this type of ounce, also known as an Avoirdupois ounce. In this case, one ounce is equal to 28.35 grams.

A troy ounce, however, is a type of measurement that was used many centuries ago in the troy weighting system. It is slightly heavier than a regular ounce, being just over 31.1 grams - or roughly ten percent heavier than a common ounce. When the price of gold is stated as being worth a certain dollar amount per ounce, it is actually the troy ounce that is being used in this measurement of the gold's weight.

The History of Gold Measurement Units

Common ounces originated out of the historical Roman system of measurement. In fact, the pound was used commonly throughout the Roman Empire, and that pound was then divided into 12 separate ounces in order to facilitate smaller units of weight.

The history of the troy ounce is thought to date all the way back to the 5th century when it was used as a system of weighting at the ancient fair of Troyes in France. Troyes, a large center of civilization having a highly significant market and international center of commerce, dictated that there should be one standardized system of weighting. In the troy system, the weight of silver was tied into a specific monetary weight whereby a pound of currency consisted of one troy pound of silver - which was equal to either 20 shillings or 240 pennies.

Today it is still this troy ounce that is used for the official weight measurement of gold. There are, however, still differences in the price of gold - even gold possessing the same troy ounce weight - depending upon what form that gold is in, such as coins or bars.

The Various Per Ounce Costs

When comparing the different forms that gold can be purchased in, it is wise to actually compare the percentage over the actual gold price for each of the options. What this means is that, since the price of gold continuously fluctuates, investors need to consider the price as a percentage of or above the actual amount of gold content.

For example, the cost of a gold bar will typically be less than the cost of a gold coin - even with the same troy ounce weight - since there is almost always going to be more actual gold in a bar than there is in a gold coin. Knowing this small fact alone can make a big difference in an investor's overall decision about which type of gold to purchase.