Weights and fineness, decoded

Two different ounces, and gold uses the heavier one

Pick up a bag of sugar and the ounce on the label weighs about 28.35 grams. Pick up a one ounce gold coin and it holds 31.1035 grams of gold. Same word, two different weights, roughly a tenth of a difference between them. Once you know that, half the confusion in a bullion listing disappears.

The everyday ounce is the avoirdupois ounce, the one used for groceries, letters and body weight. Gold is weighed on a separate and much older scale called troy weight, which was used across medieval Europe for precious metals, gemstones and apothecary goods. It is usually said to take its name from the great trading fair at Troyes in France. Troy weight never went away in the bullion trade, and the world gold market still quotes in troy ounces today.

One troy ounce is 31.1034768 grams, almost always written as 31.1035 g. It divides into 480 grains, where the everyday ounce divides into 437.5. There is a pleasing oddity buried in that: a troy pound is only twelve troy ounces, so it weighs less than an ordinary pound even though each of its ounces weighs more.

In practice, when you see oz anywhere near gold, read it as troy. Most listings simply write oz and leave the word troy unwritten. If you ever want to be certain, look at the gram figure instead, because grams mean the same thing everywhere.

Grams and kilogrammes do all the everyday work. A kilogramme of gold is 32.1507 troy ounces, and one troy ounce is a little over thirty grams. If a figure ever looks wrong to you, convert it to grams and the arithmetic becomes obvious.

Fineness: purity counted in parts per thousand

The second number on a listing tells you how much of the metal is actually gold. This is fineness, and it is expressed as parts per thousand.

A fineness of 999.9 means that out of every thousand parts of metal, 999.9 parts are gold. That is 99.99 per cent pure, spoken in the trade as four nines. 999 is 99.9 per cent, three nines. 916.7 is 91.67 per cent gold, with the remaining 8.33 per cent made up of another metal.

That last figure is itself a rounding, and it is worth knowing why. The standard behind it is 22 parts of gold in 24, which comes out at 916.667 parts per thousand once you round it, and the trade shortens that again to 916.7 for everyday use. Both are the same standard. When you come to multiply, use the longer figure, because the shorter one is a little light and shows up in the fourth decimal place of your answer.

Carats are the same information counted differently. A carat here is one twenty-fourth of the whole, so 24 carat is gold with nothing else in it, and 22 carat is 22 parts gold to 2 parts of something else. Twenty-two divided by twenty-four is 0.916667, which is exactly the 916.7 fineness above written as a decimal. The two systems are simply two ways of saying the same thing, and you will see both on the same page.

Note that this carat, the purity measure for gold, is a different word from the metric carat used to weigh diamonds. They are unrelated.

Why 22 carat exists at all

Pure gold is remarkably soft. You can mark it with a fingernail, and a coin made of it would lose detail quickly in a pocket or a till. The English coinage answer, set down in the sixteenth century and known as crown gold, was a standard of 22 parts gold to 2 parts copper. Copper hardens the alloy considerably and gives it a slightly warmer, redder tone. The gold sovereign is struck to that crown gold standard, 916.7 fine.

Modern investment coins face no such problem, because they are handled with care rather than spent, so many of them are struck at 999.9. Britannias made in recent years are 999.9 fine. One standard is purer than the other, but purity on its own is not the number a buyer works from: what matters is how much gold the coin contains, which is the next number to learn.

Gross weight is not gold content

Two figures appear on a full coin specification, and mixing them up is the single most common mistake a new buyer makes.

Gross weight is what the coin weighs on a scale: all of the metal, gold and alloy together. Fine gold content is the weight of the gold alone, once the copper or other alloy is set aside.

For a coin at 999.9 fineness the two figures are almost identical, because there is barely any alloy in it. For a 22 carat coin they are meaningfully different, and the difference is not small change. The rule that gets you from one to the other is a single multiplication:

gross weight in grams, multiplied by the fineness divided by 1,000, equals fine gold content in grams.

Use the fineness at the fuller precision wherever you have it. For 22 carat gold, 916.667 rather than 916.7 is what produces the fine gold figures printed on coin specifications, and the two multipliers part company in the fourth decimal place of the answer.

To go the other way, divide instead of multiplying. And to turn grams of fine gold into troy ounces, divide by 31.1035.

This matters because gold is bought and sold on its fine content. When you compare one coin with another, you are really comparing how many grams or troy ounces of gold each one holds. Everything else, the alloy, the size, the denomination stamped on the face, is packaging around that number.

Two worked examples

The full sovereign

A full sovereign has a gross weight of 7.98805 grams and a fineness of 916.7, which is 22 carat crown gold. The remaining metal is copper.

1. Take the gross weight: 7.98805 g.
2. Multiply by the fineness as a decimal, at the fuller precision: 7.98805 x 0.916667 = 7.3224 g of fine gold.
3. Convert to troy ounces: 7.3224 divided by 31.1035 = 0.2354 oz t.

If you run step two with 0.9167 instead you will get 7.3226, which is why the longer multiplier is the one to keep. So a sovereign holds a little under a quarter of a troy ounce of gold, and roughly two thirds of a gram of the coin is copper. A half sovereign is exactly half of all of that: 3.99402 g gross, 3.6612 g of fine gold, 0.1177 troy ounces. A quarter sovereign halves it again.

The one ounce Britannia

A one ounce Britannia is named for its gold content rather than its total weight. It contains one full troy ounce of fine gold, which is 31.1035 grams. That is the figure the market prices, and it is fixed by definition.

Because the coin is 999.9 fine rather than perfectly pure, its gross weight on a scale sits a fraction above 31.1035 g, since a tiny amount of alloy has to sit alongside the ounce of gold. The difference is a tiny fraction of a gram, and it never changes what you are buying: one troy ounce of gold. Fractional Britannias follow the same logic, holding a half, a quarter or a tenth of a troy ounce of fine gold.

Set the two side by side and the contrast is clean. The sovereign is a coin of a fixed denomination whose gold content is an awkward number, 0.2354 oz t. The Britannia is a coin of a fixed gold weight whose denomination follows from it. Neither is better arithmetic; they are just two different starting points.

Reading the line on a listing

Put it together and a specification line that looked like code now reads as plain English. Take this one:

Full Sovereign. 22 ct (916.7 fine). Gross weight 7.98805 g. Fine gold content 7.3224 g (0.2354 oz t).

You now know that 22 ct and 916.7 are the same fact stated twice, that the coin weighs almost eight grams on a scale, that just over seven and a third of those grams are gold, and that this equals not quite a quarter of a troy ounce. Every part of the line is now readable, and each figure follows from the one before it.

Three habits will carry you through almost any listing:

• Assume troy. An ounce quoted for gold is 31.1035 g unless something extraordinary says otherwise.
• Find the fine content. If only a gross weight is shown, multiply it by the fineness yourself. That is the number that describes what you own.
• Compare in one unit. Convert everything to grams of fine gold, or everything to troy ounces, before you compare two coins. Mixing units is where errors creep in.

On UK gold coins, the two fineness figures you will meet most often are 916.7 for sovereigns and 999.9 for modern Britannias, and the arithmetic above covers both.

Weight and purity are only the physical description of a coin. What you pay above the value of that gold, and why that figure differs between one format and another, is the subject of the next lesson.

Gold can fall in value as well as rise. Buying gold is not regulated by the Financial Conduct Authority in the UK, so there is no FSCS protection and no access to the Financial Ombudsman Service. Nothing in the Academy is financial advice.