What is a 'Troy Ounce'

A troy ounce is a unit of measure used for weighing precious metals that dates back to the Middle Ages. Originally used in Troyes, France, one troy ounce is equal to 31.21 grams, according to the U.K. Royal Mint. One standard ounce, used to weigh other items such as sugar and grain, is slightly less at 28.35 grams. The troy ounce is retained even today as the standard unit of measurement in the precious metals market to ensure purity standards and other common measures remain consistent over time. The troy ounce is often abbreviated to read "t oz" or "oz t." 

Some historians believe the troy ounce had its origins in Roman times. Romans standardized their monetary system using bronze bars that could be broken down into 12 pieces called "uncia" or ounce, with each piece weighing around 31.1 grams. As Europe's economic importance grew from the 10th century onward, merchants came from all over the world to buy and sell goods there. It was therefore necessary to develop a new standardized monetary weight system to make doing business much easier. Some believe the merchants of Troyes modeled this new monetary system using the same weights as their Roman ancestors.

BREAKING DOWN 'Troy Ounce'

The troy ounce is the only measure of the troy weighting system that is still used in modern times. It is used in the pricing of metals such as gold, platinum and silver.

JM Bullion says that prior to the adoption of the metric system in Europe, 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 15th century. Prior to the adoption of the troy system, the British used an Anglo-Norman French system called the avoirdupois system, which means "goods of weight" and was also used to weigh both precious metal and non-precious metal items. 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.

When the price of gold is said to be U.S. $653/ounce, the ounce being referred to is a troy ounce, not a standard ounce. Because a troy ounce is heavier than a standard ounce, there are 14.6 troy ounces — compared to 16 standard ounces — in one pound.

RELATED TERMS
  1. Optimization

    Optimization, in the context of technical analysis, is the process ...
  2. Base Metals

    Base metals such as aluminum, copper and zinc are widely used ...
  3. Bullion Coins

    Bullion coins are precious metal coins that are generally bought ...
  4. USD

    The USD is the abbreviation for the U.S. dollar.
  5. Equal Weight

    Equal weight is a type of classification that gives the same ...
  6. Monetary Reserve

    A monetary reserve is a central bank's holdings of a country’s ...
Related Articles
  1. Investing

    Trading gold and silver futures contracts

    Gold and silver futures contracts offer a world of profit-making opportunities for those interested in hedging securities or a speculative plays.
  2. Investing

    A Primer On Palladium

    This rare metal is being used in the industry more and more. See how you can get exposure.
  3. Trading

    Understanding Taxes on Physical Gold/Silver Investments

    Physical gold and silver holdings are taxed when sold-- here's how the cost basis is calculated, and ways you can offset taxes owed.
  4. Investing

    Top 5 Metal Mining Stocks of 2016 (CDE, HMY)

    Precious metal mining stocks have been on a sharp uptrend, while stock prices of base metal and industrial metal miners are languishing.
  5. Investing

    Looking for a Vanguard Gold ETF or Mutual Fund?

    Explore a detailed analysis of the Vanguard Precious Metals and Mining Fund, and learn about its characteristics, modern portfolio statistics and suitability.
  6. Investing

    What Is Wrong With Gold?

    Despite its historic and symbolic appeal, this metal is simply a commodity. Here we explore its meaning as an investment.
  7. Investing

    Newmont Mining's Earnings Look Like Gold

    Newmont Mining (NYSE: NEM) posted a shiny second quarter earnings report on Wednesday after the market closed, revealing that it had mined more gold at lower cost and was able to sell it at ...
  8. Insights

    Most Profitable Mining Companies of 2016 (CDE, AG)

    The most profitable mining companies for 2016 included small-cap precious metal miners. The greatest total profit belongs to a diversified global miner.
  9. Investing

    Three Ways To Short Gold

    Investor enthusiasm for gold has been falling by the wayside. For portfolios, that could mean it's time to short the metal.
RELATED FAQS
  1. What is the gold standard?

    Learn more about the gold standard, including its complicated global history and its connection to the fiat system and the ... Read Answer >>
  2. Has gold been a good investment over the long term?

    Examine the investment performance of gold dating back to 1933, when President Roosevelt required all gold bullion, coins ... Read Answer >>
  3. How is standard deviation used to determine risk?

    Understand the basics of calculation and interpretation of standard deviation, and how it is used to measure and determine ... Read Answer >>
  4. What's the difference between moving average, weighted moving average and exponential ...

    Moving averages are one of the most popular tools used by active traders to measure momentum. We'll take a look at three ... Read Answer >>
Trading Center