What Is The Difference Between A Troy Ounce And An Ounce?

“1 Troy ounce contains 2.75 grams more”…

So what is the difference between a Troy Ounce, and a standard ounce. This is a very common question, and one that most people have trouble answering without some reference.

Surprisingly there are 2 totally different methods for calculating silver/gold vs the method used to calculate everything else.

The most likely explanation is that Gold, Silver, and even Gun Powder are such universal and important materials, that a standard measurement system is not an option but a requirement. That unfortunately means that the people from the United States are at a small disadvantage, when it comes to properly measuring these things with the standard machines we might use in day to day life.

Exact measurements are as follows

  • 1 troy ounce = 31.1034768 grams or 480 grains
  • 1 ounce = 28.3495231 grams or 437.5 grains

Basic elementary school math will tell you that 1 Troy ounce contains 2.75 grams more of metal than the standard ounce. So an ounce of Gold would weight 2.7539537 grams more than an ounce of sugar.

 

Why does this matter?

Well if you are just buying a few ounces it might not seem like a lot, but if you are buying 10, or 100 ounces then the difference is significant. When you buy a 100 ounce bar and it weighs the same as 100 ounces of sugar you are loosing 8.85 troy ounces of metal. You can see now how this calculation error could be very costly.

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Why You Should Buy Silver Bars As An Investment

How to Buy Silver Bars

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How to Buy Silver Bars

How to Buy

Silver Bars?

So you are thinking of buying silver bars?

Perhaps you have previously purchased silver bullion or gold bullion.

Maybe you are embarking on a new financial plan to preserve your wealth in the face of growing inflation and economic instability. 

Regardless of your motive, silver bars can be a great addition to an investor’s portfolio so long as you have the information you need to make the best possible decision for you or your family.

Before you jump in with both feet, it is important to understand a few basic factors regarding silver bars:

1) The different sizes of silver bars

2) Where to buy silver bars and determining the best dealer for you

3) The ease of liquidity

4) Privacy factors

 

I. Different Sizes of Silver Bars

Silver bars come in different sizes and weights.  They are sold primarily in troy ounces and in increments of 1 oz., 5 oz., 10 oz., 100 oz., and 1000 oz. bars.  Some mints even sell them in small fractional or gram sizes.

There is no right or wrong way to own or purchase silver bars.  Due to fabrication costs, the smaller the silver bar, the larger premium per ounce a buyer will have to pay.  The opposite is true for larger bars; the bigger the silver bar the lower the premium per ounce one will have to pay.  This is due to the fact that it is more cost effective to produce a 100 oz. silver bar than it is to produce a smaller, for example, 10 oz. silver bar.

The best size silver bar to buy depends on your motives for buying in the first place.  As an investor, only you know why you are buying silver bars and what your goal is.  Large silver buyers are interested in preserving their wealth while getting the most ounces for their fiat currency.  Small silver bar buyers are also interested in preserving their wealth, though they find the ease of liquidity and flexibility provided by smaller silver bars to be worthy of their typically higher per ounce price.

 

II. Where to Buy Silver Bars

Silver bars can be bought in numerous ways, including but not limited to buying online at websites such as eBay or our website, GoldSilver.com.  Some investors buy silver bars locally at coin or bullion shops, while in some countries investors can buy silver bars directly from banks.

Almost every silver retail outlet has more than one payment option:  bank wire transfer, credit card, cash, postal money orders, checks, and PayPal are all but a few payment methods being used within the precious metals industry.

Always consider any differentiators that some silver dealers may have over others. The silver dealer with the lowest price doesn’t necessarily mean it is the best choice.

Mike Maloney, author of the # 1 best selling precious metals book Guide To Investing In Gold And Silver, says that fellow investors must take into account the value, not merely the price, of any investment decision.  For example, GoldSilver.com’s value differentiators are the EducationVault Storage Options, and Exit Strategy that we provide our bullion customers.

 

III. The Ease of Liquidity

Definition of ‘Liquidity’ according to Investopedia*

1. The degree to which an asset or security can be bought or sold in the market without affecting the asset’s price. Liquidity is characterized by a high level of trading activity. Assets that can be easily bought or sold are known as liquid assets.

2. The ability to convert an asset to cash quickly. Also known as “marketability”. 

Liquidity basically deals with the ability and speed to convert your asset into cash when it is time to do so.  The question on an investment’s ease of liquidity or marketability is very important when choosing the right brand or hallmark of silver bars.  It is important to stick with bars minted from trusted, established and well-known suppliers. 

If you buy established industry hallmarks and silver bar brands such as those offered through GoldSilver.com, you will be able to easily sell your bars for a fair price when the time is right for you to sell.  Conversely, if you make the mistake of buying silver bars from suppliers that are not well known or established, the value of the bars might be in question when it comes time to sell.  

Buying silver bars with weak hallmark recognition introduces the risk of your being stuck with unknown silver bars nobody wants to buy or place a bid upon, or of being forced to sell your silver bars for less than what they are worth.  

For the best liquidity and largest sellback options, stick with highly recognized, globally respected silver bar hallmarks and brands.

 

IV. Privacy Factors

When discussing privacy in silver bullion investing, we need to examine privacy first in terms of buying bullion from a dealer, and secondly, in terms of selling bullion to a dealer.

Regarding buying, customers can buy any amount of silver bullion coins and or bars from our website here at GoldSilver.com and the transaction is private.  In other words, our payment system is set up so customer’s bullion purchases do not have to be reported to the powers that be, all purchases can thus remain private.

Regarding selling, any combination of a customer selling 1000 oz or more of silver bullion bars / rounds triggers a 1099B reporting requirement from a bullion dealer.  In other words, if you sell 1000 oz or more of silver bullion bars and or rounds at one time to a bullion dealer, you will be required to give them your Social Security Tax ID number and or Passport number if you are an international customer.

For more information on private forms of silver bullion and privacy on silver bullion transactions click here.

 

Due Diligence is a Must

 

Buying silver bars is an excellent strategy for preserving or building wealth long term.  

 

Being a prudent silver investor, you should certainly take the time to determine the right size silver bar and hallmark for your investing objectives.

 

Finally, always perform the proper due diligence when choosing a reputable silver dealer, who offers high-quality silver products and the services you require.  By properly doing so, you will be ready to make the right silver bar purchases and decisions.

What is a Troy Ounce?

What is a Troy Ounce?

When you start buying and selling gold, silver, and other precious metals, you might be surprised to find that a different unit of measure is used to weigh precious metals. Typically, these metals are weighed using the troy weight system as opposed to the more familiar way that we measure other goods such as sugar or grains.

Why Are Troy Ounces Important?

If you buy a one ounce gold coin and place it on a standard grocery-store scale, you would find that it’s approximately 10% heavier than an ounce of beef. The two measures are not the same. Many people don’t realize this, which is why they often fall victim to sellers who try to boost the value of their products by simply listing them in ounces. For example, a seller could claim that a precious metal weighs 100 ounces, but you would be losing around 10% of its value because it actually only weighs 90 troy ounces.

It may seem like an unnecessarily complicated system, but there are good reasons that precious metals have their own unit of measure. The troy was retained as the standard unit of measurement over the avoirdupois ounce to ensure purity standards and other common measures remained consistent over time.

History of the Troy Ounce

No one knows for sure when and where the Troy weight system was born, but the most commonly held explanation is that its name is derived from Troyes, a trade market in France. Merchants came from all over the world to buy and sell goods, so a standardized weight system would have made doing business much easier. Later, many places in Europe came up with their own version of the troy ounce, but the French troy is believed to be the system most closely related to the one that we use today.

If we care to trace the origins of the troy even further back, we could look to the Roman monetary system. Romans used bronze bars as currency, and the bar that was equal to one pound today was referred to as an “aes grave.” A twelfth of that was called an “uncia,” or ounce. Today, a troy ounce is a twelfth of a troy pound.

The Troy Ounce Today

Prior to the adoption of the metric system, French-born King Henry II of England adjusted the British coinage system to be more reflective of the French troy system. The system was adjusted periodically, but troy weights as we know them today were first used in England in the 1400s. By 1527, the troy ounce became the official standard measurement for gold and silver in Britain, and the U.S. finally followed suit in 1828.

Today, the troy ounce is the only unit of measure of the troy weights system that we use. Just like the traders of Troyes in France, buyers and sellers today need a good, standardized form of measurement for precious metals.

Troy Ounces vs. Avoirdupois Ounces

So, how is an ounce of gold different from an ounce of sugar? While the gold is measured by troy ounces, goods such as sugar or other items are measured using avoirdupois ounces. The name might sound completely strange to you, but the avoirdupois is the unit of measure that we use to weigh almost everything else other than precious metals. The scales at the grocery store and the scales in your bathroom weigh things in avoirdupois ounces. Because the avoirdupois ounce so common, we simply refer to it as “ounces.”

Obviously, then, a troy ounce is a bit heavier than a regular ounce. One regular ounce is 28.35 grams, while a troy ounce is 31.1 grams. The weights are close, but the difference becomes very noticeable when you’re trading in larger quantities of precious metals.

Here is where it can become confusing. Recall how we said that the troy system was indirectly derived from the Roman monetary system, using 12 troy ounces to make up one troy pound. This makes a troy pound lighter than a regular pound, even though troy ounces are heavier. This is only possible because fewer troy ounces are needed to make a pound — 12 as opposed to 16 ounces for a regular pound.

The system can seem confusing at first if you aren’t very familiar with it, but it does get easier. At JC Bullion, we already list all precious metals using the troy system; however, if you ever come across an item that is being weighed in avoirdupois ounces, you can easily convert it to troy ounces. Simply multiply the given amount by .91 to find the equivalent weight in troy ounces. You may also want to take note that copper, being a base metal, is weighed using the avoirdupois ounce. If you are going to be buying copper bullion, be sure to keep this in mind.

As you can see, it’s important that any buyer of precious metals has a thorough understanding of the troy ounce if he or she wants to safely and smartly navigate the precious metals market.