Troy Ounces and Fineness Explained: How Precious Metals Are Weighed

Precious metals have their own vocabulary for weight and purity. Prices are quoted per troy ounce, coins are described as .999 or 22 karat, and two coins that both say “one ounce” can weigh different amounts on a kitchen scale. Once the units are clear, it becomes simple to work out how much pure metal a coin or bar actually contains.

The troy ounce

The troy ounce is the standard unit for gold, silver, platinum and palladium. It is not the same as the ordinary ounce used for food in the United States.

A troy ounce is therefore roughly 10% heavier than an ordinary ounce. When a price is quoted “per ounce” for a precious metal, it always means per troy ounce.

The troy system has other units that still appear in jewellery and older references:

• Grain: 1 troy ounce = 480 grains.
• Pennyweight (dwt): 1 troy ounce = 20 pennyweights; 1 pennyweight = 24 grains.
• Troy pound: 12 troy ounces, now rarely used.

In Asia, other traditional units are common, such as the tael in Chinese markets and the tola in India, Pakistan and the Gulf. Their exact weight varies by place, so it is best to check the local definition.

Fineness: how pure is the metal?

Fineness expresses the share of pure metal in an alloy. The modern standard is millesimal fineness, in parts per thousand.

• .9999 (“four nines”) means 999.9 parts pure metal per 1,000.
• .999 means 999 parts per 1,000.
• .9167 means 916.7 parts per 1,000, the standard for 22-karat gold.
• .900 was the standard for many older circulating gold and silver coins, including pre-1965 US silver coinage.

Karats

Gold jewellery and some coins use karats, where 24 karats means pure gold. Each karat is one twenty-fourth.

Karat should not be confused with carat, the unit of weight for gemstones.

Gross weight vs fine weight

Here is where many newcomers get confused. A coin’s gross weight is what it weighs on a scale, alloy included. Its fine weight is the amount of pure metal it contains. The formula is:

Fine weight = gross weight × fineness

Coins made of 22-karat gold are a good example. The South African Krugerrand and the American Gold Eagle each contain one troy ounce of pure gold, but because they are alloyed with other metals for hardness, they weigh about 1.0909 troy ounces in total, roughly 33.93 grams. A one-ounce Canadian Gold Maple Leaf at .9999 fineness weighs almost exactly one troy ounce, since there is very little alloy.

For bullion purposes, both contain the same amount of gold, and they should be valued on that basis.

Why some coins are alloyed

Pure gold and silver are soft. Coins meant to circulate were traditionally alloyed with copper or silver to resist wear. Modern bullion coins have no need to circulate, so several mints strike them at .999 or .9999, but others kept the historic 22-karat standard for tradition and durability. Neither approach is better for the holder of bullion, as long as the fine content is known.

Putting it together

To value any coin or bar, take the fine weight in troy ounces and multiply it by the spot price, then compare the result with the asking price to see the premium. This simple step makes it easier to compare products across mints and sizes. Spot prices and the factors behind them are discussed in What Moves Gold Prices, and the same arithmetic underlies the gold-silver ratio, which only makes sense when both metals are measured in troy ounces.

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