Ounce, Troy Ounce, and Pennyweight
The precious metals industry uses the troy ounce and pennyweight as its basic unit of measurement, even in countries which adopted the metric or imperial system, used to weigh and trade precious metals. Ounce is a unit of weight in the Avoirdupois system.
Here’s what each term means:
Ounce (oz): An ounce is a unit of weight that is commonly used to measure mass. In the context of food etc. An ounce is equivalent to 28.349 grams which is 1/16 of a pound (Avoirdupois).
Troy Ounce (t oz): A Troy ounce is a unit of weight used specifically to measure precious metals. It is slightly heavier than a regular ounce and is equivalent to 31.1035 grams. The Troy ounce is named after the city of Troyes in France, where it was first used as a unit of measurement for precious metals.
Pennyweight (dwt): A Pennyweight is a unit of weight used to measure precious metals, especially for smaller quantities. One Pennyweight is equivalent to 1/20th of a Troy ounce or 1.5552 grams.
So, when buying or selling coins or bullion, it’s important to know which unit of measurement is being used to determine the weight and price of the item. The price of precious metals is typically quoted per Troy ounce, and the weight of smaller items may be given in Pennyweights.
Global and Regional Measurement Standards
While the troy ounce is universally accepted in the global precious metals market, the use of the pennyweight and the “regular” Avoirdupois ounce is more prevalent in the United States. This distinction is crucial for accurate trading and valuation of precious metals. It’s especially important not to confuse the Avoirdupois ounce with the troy ounce when translating weights into prices per gram. For instance, if the market price of gold is quoted at $2,400 per troy ounce, calculating this price using an Avoirdupois ounce would incorrectly suggest a gram cost of approximately $84.8. However, using the correct troy ounce measurement, the price per gram should be accurately reflected as $77.17. This difference underscores the necessity of understanding and applying the correct units of measurement to avoid significant pricing errors and potential financial losses.
