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Last Updated on: 16th September 2021, 06:54 pm
If you have any experience buying gold, silver, or platinum-class metals, you've probably noticed that exchange markets list bullion prices by the troy ounce rather than a U.S. customary ounce. If you're wondering what the former is, you aren't alone. As veterans in the precious metals industry, we're often asked “What is a troy ounce?”
Before getting started with precious metals investing, take a minute to learn what a troy ounce refers to and really hammer down the differences between it and a standard ounce. Otherwise, you'll be vulnerable to scam artists and frauds looking to prey on your ignorance.
To bring you up to speed, I've put together a short guide to the troy ounce and how to calculate troy ounce to ounce conversions easily in your head.
Table of Contents
Troy Ounce 101: What Is A Troy Ounce?
Before answering the question “What is a troy ounce,” you should start by understanding the metric system of measurement. Why? Because troy ounces are often measured against grams, which don't fit evenly into either customary or troy ounces.
A gram is the metric unit of mass that—to get a little technical—is defined as the absolute weight of a volume of water equivalent to the hundredth part of a metre cubed at a temperature of four degrees Celsius. More plainly, a gram is one one-thousandths of a kilogram, which is itself 2.204 imperial pounds in the U.S. customary system of measurement.
A troy ounce is heavier than a standard avoirdupois ounce (oz.), of which the latter we commonly refer to as an “ounce” in the United States. Precisely, a troy ounce weighs 31.1 grams whereas an avoirdupois ounce weighs roughly 28.3 grams.
A troy ounce weighs about 3% of a kilogram or about 6.8% of an imperial pound. In other words, not very heavy at all! This should give you a rough idea of what to expect when feeling or holding a base unit of gold or silver bullion.
The Troy Weight System
The troy ounce isn't a standalone unit of measurement. Rather, it's one weight in a larger family of units that have their origins in the Middle Ages. Below, I've listed the four primary weight units used in the troy system:
- Grain (64.8 milligrams)
- Pennyweight (24 grains)
- Troy ounce (20 pennyweights)
- Troy pound (12 troy ounces)
The troy ounce stands in contrast to the avoirdupois system of measurement, which originated a couple of centuries prior. Today, the United States relies on the avoirdupois system of ounces and pounds for all measurements of mass aside from the precious metals industry.
At this point, you're probably wondering “Why use the troy ounce?” Within the precious metals market, the troy ounce has simply become the standard unit of measurement after centuries of usage. There's no logical basis for using it aside from the fact that it's been the global custom for many years and to change it would likely cause confusion among traders.
The Origin of the Troy Ounce
Like the origin of gold, the origin of the troy ounce is a matter of conjecture. The leading hypothesis dates back to the Middle Ages, when goldsmiths and merchants settled on the grain-based troy system as a standard unit of measure in the gold trade.
The namesake of the troy ounce is likely the French trading town of Troyes, where British traders and merchants used to buy and sell goods beginning in the 9th century AD. A troy ounce of gold was later utilized as the standard by the United States Mint in the early 1800s.
The adoption of the troy ounce standardized gold and silver weights, making it easier to calculate the gold-silver ratio among traders.
Since the 1400s, troy ounces have been the preferred unit of measurement within the precious metals industry. Gold and silver bullion, for example, are weighed and marketed exclusively in troy ounces on commodities exchanges like the COMEX.
What Is A Troy Ounce Converted to A Customary Ounce?
A troy ounce-to-ounce conversion isn't difficult. Since the troy ounce is 9.8% heavier than the customary avoirdupois ounce, you can get a rough conversion simply by multiplying a weight measured in regular ounces by 1.1 times.
This conversion method lends itself well to mental math, since it's a matter of merely adding 10% on top of the original sum. For example, 5 regular ounces of gold is the rough equivalent of 5.5 troy ounces, since ten percent of 5 is (.5).
The inverse, 1 troy ounce to ounces in the avoirdupois system, can be done by subtracting 10% off the original sum. Therefore, 10 troy ounces is about equal to 9 customary ounces.
Add Some Ounces to Your IRA Today
Now that you know everything there is to know about troy ounces vs. normal ounces, consider learning more about the value of precious metals as an investment option. During times of economic instability, gold and other precious metals can hedge against volatility in financial markets—allowing you to keep more of your wealth when the going gets tough.
Take action today. Read our exclusive guide to learn more about IRA approved metals for your retirement savings account.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.