How is Gold Measured?
It's a truth universally acknowledged that gold is a timelessly valuable commodity. This fact of life begs the question; how do we measure the value of gold?
A stack of gold bar
Gold is valued using different units of measurement around the world, focusing on both its purity and weight.
Measuring Gold by Weight
Gold is special in that it has its own weighing system: the troy system. The troy system is divided into several units: the grain (0.065 grams), the pennyweight (24 grains), the troy ounce (20 pennyweights), and the troy pound (12 troy ounces).
The most commonly used of these units to weigh gold is the troy ounce (oz t). One troy ounce is equal to 31.1 grams. Daily gold prices are usually displayed in troy ounces.
A pennyweight (dwt) is one of the oldest measurements. It is primarily used today by jewelers to calculate the weight, and cost, of gold and other precious metals when making jewelry. A pennyweight weighs around 1.56 grams which equals 1/20 of a troy ounce.
As well as the troy ounce, it's also common to display gold prices by the kilo. One kilo of gold is equal to around 32.15 troy ounces.
Measuring Gold by Purity
Weight is not the only measure of gold value; it's also vital to consider purity. The karat (kt) is a standard way to measure the purity of gold. As gold is such a soft metal, it's often crafted into an alloy to render it more suitable to be made into jewelry and ornaments.
Karats refer to the volume of pure gold within your gold item. Karats are counted in 24 parts, with gold of the highest purity attaining 24-karat gold status.
In the British Indian system, the tola was the base unit of measurement for gold. Introduced in 1833 and officially replaced by the metric system in 1956, the tola is still a popular measuring unit in South Asian countries like India, Pakistan, Bangladesh, Nepal, and Singapore.
The tola is now standardized to 11.66 grams which is equal to exactly 3/8 of a troy ounce. The ten tola gold bullion bar is the type of bullion most commonly traded in South Asia.
The tael, or tahil, is a unit of measurement predominantly used in East and Southeast Asia. The tael was standardized to 50 grams and is part of the Chinese system of weights. The tael is also in use in Hong Kong and Taiwan and corresponds to 37.8 and 37.5 grams respectively.
In Thailand, gold is measured in bahts. One baht weighs around 15.24 grams. Since the standard accepted purity of Thai gold comes in at 96.5%, the actual weight of gold in a 15.24-gram bullion bar is approximately 14.7 grams. When used in jewelry, a baht weighs around 15.16 grams.
Wherever you buy your gold, be sure you're in the know about the gold's weight and purity before committing to a purchase.