What Is a Troy Ounce of Gold?

One of the first terms you come across when following the financial news or watching gold prices is the ounce. Although many people in Turkey save in gram gold or quarter coins, the main factor behind the price of these products is the value of the ounce on international markets. Understanding what an ounce of gold is, is the first step to understanding how the gold market works.

In a system like Turkey's, where gold prices depend both on the exchange rate and on the international gold price, following the ounce gives the buyer a much wider view. In this guide we look at what an ounce equals and how it affects local prices, step by step.

The ounce as a unit of weight for gold

The ounce used on the precious metals market is a special unit called the troy ounce. One troy ounce is about 31.10 grams (exactly 31.1035 grams). It is accepted as the standard unit of the global gold trade.

When the news says "the ounce of gold has risen", it refers to a change in the dollar value of these 31.10 grams of pure gold. The ounce price is always quoted for pure gold. We cover the properties of fine gold separately in what is fine gold.

Pricing on global markets

On international markets gold is traded in US dollars. The figure shown on financial screens under the code XAU/USD is the dollar value of one ounce of gold. Large financial institutions and refineries buy and sell gold on the basis of this price.

The ounce price is shaped by many factors, including interest rate decisions, inflation expectations, geopolitical events and the balance of supply and demand worldwide. We look at these factors in detail in why gold prices rise. A major economic development on the other side of the world can move the ounce price within a short time.

How the ounce and gram gold are linked

In Turkey, the base price of gram gold is calculated from the dollar price of an ounce and the current dollar exchange rate. These two variables form the floor price of gram gold on the local market. Many people only follow the dollar rate, but the ounce price is at least as decisive.

The logic is simple: divide the dollar price of an ounce by 31.1035 to get the dollar value of 1 gram of pure gold. Multiply that by the current dollar rate to get the Turkish lira value of 1 gram of pure gold. Jewellers' prices are formed by adding a buy/sell spread to this base value. That is why the gram gold price rises when the ounce rises, even if the dollar rate stays the same.

How to follow the ounce price

Looking only at the domestic market when you save in gold gives you an incomplete picture. Because the gram price depends on two variables, it can stay flat while the ounce falls and the dollar rises, or the opposite can happen.

You can follow ounce and gram gold prices live on our market page. If you want to calculate what a certain amount is worth today, or see the current value of a past purchase, use our tools section.

Ounce and gram gold compared

You can ask any questions about ounce and gram gold in person at our store. Our address and contact details are on the contact page.

This article is for general information only and is not investment advice.

Frequently Asked Questions

How many grams is 1 ounce of gold?

One troy ounce, the unit used for precious metals, is about 31.10 grams; the exact value is 31.1035 grams. This is a standard accepted worldwide.

Can you buy an ounce of gold physically?

Yes, bars and coins are produced at a weight of 1 ounce. In Turkey, however, individual buyers usually prefer packaged gold of 1, 5 or 10 grams because it is more flexible for the budget and easier to buy and sell.

Can the gram gold price fall while the ounce price rises?

Yes, it can. If the dollar value of the ounce rises but the dollar rate falls more sharply, the value of gram gold in Turkish lira can go down. The result depends on how the two variables move together.