In the US the price of gold is measured in grams and troy ounces. If you plan on buying gold, you should know what these units of measurement mean.
What Is A Gram?
The word gram is derived from gramma, a Latin word that means “small weight”. If you have gold that weighs less than an ounce then you should measure the weight in grams.
For some perspective, a gram weighs about the same as a paper clip.
What Is A Troy Ounce?
The term troy ounce originates from Troyes, a city in France. There are several western countries that use troy ounces is the only old weighting system still used in modern times. The same unit of measurement is used for silver and platinum.
Gold dealers use troy ounce as a unit of measurement when they trade significant amounts of gold. Bullion dealers and central banks trade Good Delivery Bars, which weigh 400-troy-ounce.
Regular gold investors transact with small amounts of gold that weigh 100-troy-ounce because it is compact and easy to manage. To get the gold price per gram you need to convert the troy ounces to grams. Take note that one troy ounce is equal to 31.1034 grams. A troy ounce is different from a standard avoirdupois ounce, which is mostly used to measure foods in the US. A standard ounce weighs 28.34-grams. The difference between these units of measurement might look small but the difference will affect your gold calculations significantly. Using standard ounces can lead to massive discrepancies and losses. Using the right unit of measurement will help avoid confusion and the possibility of losing money.
Measuring the purity of gold
When we say that a troy ounce of gold is 31.1034 grams we can only attribute it to .999 fine gold. Gold that is less pure gold weighs less.
How to buy gold safely
It is important to understand how gold is measured and priced. However, there is a lot more about gold investments.
1. Buy Physical Gold
You can in gold by buying gold bullion. When buying gold stick to physical gold bullions. You can buy your bullion from online bullion dealers or find reputable dealers in your area.
2. Purchase Pure Gold
The value of gold depends on its weight and purity. The bullion that you buy will have other information on it like weight and manufacturers. Gold bullion is regarded as investment grade because of its purity which is at least 99.5% pure.
3. Buy workable sizes
Small gold bars are compact and easier to resell. Finding a buyer who will buy a 10. oz bar might be harder than buying ten 1. oz gold bars. You have different options you can choose from. You can buy gold bullion bars or bullion coins. All forms of gold bullion have a significant value but gold coins are in high demand. Take the American Eagle gold coins. They are made with 91.67% pure gold but have a higher value than a gold bar made with 99.99% pure gold.
4. Compare Prices
Before accepting a price for your gold bullion try to get as many quotes as possible. Some offer low prices others offer discounts on big purchases. A lot of dealers offer prices in troy ounces however, some dealers will give you the gold price per gram.
Try to avoid dealers that overcharge for shipping, require more money for authentication certificates, administrative costs, and other extras. These fees will increase the cost of your gold and skew your investment returns.
Is there a good time to buy gold?
The ideal situation is to buy gold at a low price and sell high for a profit. It is hard to predict when prices will go up, so in this imperfect world where no one really has a crystal ball to see when you should buy gold. You can always count on gold to retain its value so buying gold is always the smart thing to invest in.