DEFINITION of 'Troy Ounce'

A troy ounce is a unit of measure 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 UK 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.

Some historians believe the troy ounce obtained its origins from Roman times. Romans standardized their monitory 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 US $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. Crime of 1873

    The Crime of 1873 was the notable omission of the standard silver ...
  2. Accounting Standard

    An accounting standard is a common set of principles, standards ...
  3. Weighted Average

    An average in which each quantity to be averaged is assigned ...
  4. Equal Weight

    Equal weight is a type of classification that gives the same ...
  5. International Accounting Standards ...

    An older set of standards stating how particular types of transactions ...
  6. Bimetallic Standard

    A system where a government recognizes coins composed of gold ...
Related Articles
  1. Investing

    Credit Suisse Lowers 2017 Gold Forecast

    Credit Suisse analysts recently cut their 2017 full-year gold forecast to $1,338 per ounce.
  2. 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.
  3. Investing

    5 Best Bets For Buying Gold

    Gold is a desirable alternative for those looking to diversify their risk. Jewelry, bullion, gold-mining companies' stocks, and ETFs are some of the available investment vehicles.
  4. Investing

    A Primer On Palladium

    This rare metal is being used in the industry more and more. See how you can get exposure.
  5. 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.
  6. 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.
  7. Investing

    A Historical Guide to the Gold-Silver Ratio

    Regardless of the direction in gold and silver prices, investors can make money by trading on the price relationship between the two metals.
  8. Investing

    These 2 Stocks Give You Leverage on the Best-Performing Asset of 2016 (AG, SLW)

    With political events, such as Brexit, sucker-punching global equity markets and spiking investor fears of the unpredictable, silver has made further gains, and this is during the summer months, ...
  9. Investing

    Should You Add Metals To Your Portfolio? (SLV, GLD)

    This study examines how various metals have performed over the last 10+ years, with analysis of whether you should consider investing in metals.
  10. 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.
RELATED FAQS
  1. How much of a diversified portfolio should be exposed to the metals and mining sector?

    Learn what criteria investors use to determine what percentage of their diversified portfolios should be exposed to the metals ... Read Answer >>
  2. 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 >>
  3. Weighted Average Shares Vs. Outstanding Shares

    What's the difference between weighted average shares outstanding and basic weighted average shares? Read Answer >>
  4. 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 >>
  5. What part of the economic cycle is best for investing in the metals and mining sector?

    Consider the pattern of growth and loss in the metals and mining sector, and find out why it can be challenging to correlate ... Read Answer >>
Hot Definitions
  1. Return On Equity - ROE

    The profitability returned in direct relation to shareholders' investments is called the return on equity.
  2. Working Capital

    Working capital, also known as net working capital is a measure of a company's liquidity and operational efficiency.
  3. Bond

    A bond is a fixed income investment in which an investor loans money to an entity (corporate or governmental) that borrows ...
  4. Compound Annual Growth Rate - CAGR

    The Compound Annual Growth Rate (CAGR) is the mean annual growth rate of an investment over a specified period of time longer ...
  5. Net Present Value - NPV

    Net Present Value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows ...
  6. Price-Earnings Ratio - P/E Ratio

    The Price-to-Earnings Ratio or P/E ratio is a ratio for valuing a company that measures its current share price relative ...
Trading Center