Gold has been used for decades as an investment for a better future and increasing family finances. Therefore, many people invest in gold coins, jewelry, and gold bullion worldwide.
Even though various factors affect the gold price, including the world market conditions and the US dollar strength, this precious metal is still the most stable choice for investment. Its official price varies daily, so it is crucial to know how much is a pound of gold worth to be sure of the value of your investment.
Troy and Avoirdupois Measuring System
It is vital to know that you can measure gold in troy ounces or pounds, but never in a kitchen ounce. If you are not familiar with these differences in measurement, you can quickly become a victim of fraud.
Troy measuring system
The troy weight got its name after Troyes, the trading town in France. English traders used this measurement unit for trading back in the 9th century, but it officially became a part of a British measuring system in the 15th century. Troy weights include:
- Pennyweight or 24 grains
- Troy ounce or 20 pennyweights
- Troy pound or 12 troy ounces
Unlike the avoirdupois system used for measuring products, you will use the troy measuring system to calculate precious metals and stones’ weight.
Keep in mind that converting between ounces and kilograms can confuse Americans since they don’t use a metric measurement system in everyday life.
Ounces vs. troy ounces
For a start, you should understand different measurements, such as:
- Dry ounces – You use them for daily weight measurement of sugar, cereals, fruits. There are 16 ounces in one pound and 35.27 in one kilogram.
- Liquid ounces – They are a measure for the liquid volume, especially water and milk. One liter is equal to 33.8 US fluid ounces.
- Troy ounces – You need to use them to measure precious metals like gold, silver, palladium, and platinum. It is slightly heavier than the traditional ounce, weighting precisely 31.1 g.
- Troy pound – A troy pound is equal to 12 troy ounces. Interestingly, most traders measure gold in 12 ounces rather than one troy pound when selling this precious metal.
|Measures||Troy weight||Avoirdupois weight|
|Grain||1 grain is equal to 0.0065 g||437.5 grains are equal to 28.35 g|
|15.43 grains are equal to 1 g|
|480 grains are equal to 1 troy ounce|
|Pennyweight||1 pennyweight is equal to 24 grains||Not used in the weight measurement system|
|1 pennyweight is equal to 1.55 g|
|20 pennyweights are equal to 480 grains|
|20 pennyweights are equal to 1 troy ounce|
|20 pennyweights are equal to 31.1 g|
|Gram||31.10 g is equal to 1 troy ounce||28.35 g is equal to 1 ounce|
|373.24 g is equal to 1 troy pound|
|Ounce||1 troy ounce is equal 31.10 g||1 ounce is equal to 28.35 g|
|12 troy ounces is equal to 1 troy pound||16 ounces is equivalent to 1 pound|
|Metric ton||1,000 kg is equal to 32,150.7 troy ounces||1 metric ton is equal to 2,204.6 pounds|
|Long ton is equal to 2,240 pounds|
|Short ton is equal to 2,000 pounds|
Be aware that the conversion between troy ounces and troy pounds is a bit confusing. Therefore, you will find gold bullion almost always measured in ounces or kilograms.
One more fact! One troy ounce is only about 10% heavier than an ounce. On the other hand, a troy pound weighs much more than a pound.
Avoirdupois measuring system
The avoirdupois ounce is the smallest unit of measure in the weight system. It is an official measuring system in the US, but you can also find it in the UK, Australia, New Zealand, and other former UK colonies.
Avoirdupois means ‘goods of weight’ and is derived from the Anglo-Norman French aveir de peis. It signified goods sold wholesale measured on large steelyards and scales.
Even today, you can meet jewelers trying to deceive customers by selling an ounce of gold instead of a troy ounce. Such fraud is not complicated since only a professional can notice such a slight difference in weight.
Luckily, you can quickly convert avoirdupois ounces to troy ounces by multiplying it with 0.91. However, the best option is to buy precious metals with engraved weight and purity or government minted products with a guaranteed weight in troy ounces.
How Does Gold Cost?
When you decide to buy gold, there are two models for estimating its potential value:
Gold spot price
It is the price for one troy ounce of gold on the international gold market. It always refers to the bid price of stock exchanges worldwide and is the most commonly quoted price on the stock exchange.
This particular gold price is the same everywhere but can slightly vary depending on each country’s currency value or the dealer premium.
Many factors influence the spot price of gold, including supply and demand. The more people in the world try to buy gold, the higher the gold price will be because of a more significant offer on the stock exchange.
Keep in mind that you can’t buy gold bars or gold coins at this price since it only refers to unprocessed precious metals.
Gold future price
Gold futures price refers to physically delivering gold in the future. On the formation of these prices affect:
- Spot gold price
- Fluctuations in supply and demand
- Transport costs
- Storage costs
- The risk-free rate of return of gold to the owner
This investment is attractive because of the possibility that customers don’t pay the entire amount. Instead, the agreement between buyer and seller includes gold spot price and its weight within the delivery month.
Factors that affect gold futures prices
Various factors influence changes in gold value, and its price changes every few seconds. In addition to supply and demand factors, several other factors may affect a gold worth:
- Inflation – The gold value always falls when inflation rises. Luckily, inflation and deflation change frequently, so the gold value remains stable on average.
- Interest rates – The relationship between gold and interest rates is inversely proportional. With higher interest rates, the gold value falls because people sell gold to earn more. When interest rates fall, the demand for gold is higher.
- State reserves – Each state has a certain amount of gold. When the government starts buying more gold than it sells, its value grows, and the gold supply becomes insufficient.
- Correlation with other assets – Customers see gold as an object of great diversity in their portfolios because it has a low negative correlation with other assets.
- Geopolitical factors – During geopolitical crises, the value of gold is usually on the rise, as gold acts as a safe investment.
How Much Is a Pound of Gold Worth?
As I have already mentioned, you can see only troy ounces in the international gold trade. Therefore, you practically can’t use troy pounds for that purpose anywhere, including the US.
Gold troy pound value per day
|Currency||June 15, 2021.||June 26, 2021.|
Fortunately, it is not difficult to convert troy ounces to troy pounds if you prefer that way. Since one troy pound is equal 12 troy ounces, you can quickly recalculate the price of gold:
gold price per 1 troy ounce x 12 = gold price per 1 troy pound
Live Gold Price per Ounce
Gold Price Variations Through the Decades
In the past, the price of gold remained unchanged for decades. On the other hand, modern economic and political developments in the world have led to the fact that today gold value changes several times during one day.
Gold average price in the 19th century
For example, gold prices were stable and almost unchanged during the 19th century. Believe it or not, they fluctuated only from $18.93 to $18.98 during 45 years.
Gold average price in the 20th century
The situation was entirely different in the 20th century. Gold prices slightly increased by 1976, when everything went crazy. Very soon, they tripled compared to 1976 and became even ten times higher during the 80s and 90s.
Gold average price in the 21st century
As you can see, gold prices in the last ten years went up insanely, and no one knows what to expect in the future. We will see soon.
Gold will always have a particular value. No matter how much its price varies, it will always be a safe investment. When you know the principles of the global gold market and a measuring system you need to use, you can wisely invest in precious metals and keep your money safe for rainy days.