Troy ounce in gold trading

A troy ounce is the unit of weight used for precious metals. One troy ounce equals exactly 31.1034768 grams. The everyday (avoirdupois) ounce used for food and parcels is 28.3495 grams, so a troy ounce is roughly 10% heavier. Every XAUUSD quote, every COMEX contract and every bullion bar is priced per troy ounce.

How it applies to gold trading

The troy ounce is the bridge between the price on your screen and the gold you might see in a shop. If spot gold is $4,000 per troy ounce, one gram is $4,000 ÷ 31.1035 ≈ $128.60, and a 10-gram bar has a metal value of about $1,286 before any premium. A kilogram bar contains 32.1507 troy ounces, so at the same price it is worth about $128,600.

On a trading platform the troy ounce is also the smallest building block of a position. A micro lot (0.01) on most platforms is one troy ounce, so a $1 move in XAUUSD is $1 of profit or loss. A standard lot of 100 ounces turns the same $1 move into $100.

Futures and ETF documents state weights in fine troy ounces, meaning the pure gold content after the fineness of the bar is applied, which is a further small adjustment from gross weight.

A common mistake

Converting the gold price into local units using the 28.35-gram ounce. The error is about 10%, enough to make a jeweler’s quote or a tola price look wrong when it is not.

See also: Gram and 10-gram pricing, Tola, Lot, Contract size.

Frequently asked questions