Buying gold is an investment, especially in times of crisis. During the COVID-19 virus pandemic, the price of gold in the market has reached its historical maximum, positioning itself above $2,000 per ounce. With the weakening of the US dollar as the world currency, the strengthening of the Euro, and falling property prices, the price of gold has inevitably risen, making it (like Bitcoin) a desirable investment.
To buy gold, you must inform yourself and part of it is knowing how its value is measured, how much a gold bar weighs and what its presentation is.
Due to the reasons listed above, it is to be expected that many are choosing to purchase this precious metal. After all, and since time immemorial, gold has been considered extremely valuable because 1) it does not tend to depreciate and 2) it offers profitability, especially in times of crisis or economic collapse.
But how much does a gold bar weigh and how to buy it? Is it the only way to invest in gold? Well, the answer is a simple “it depends”. In general, gold as an investment can be bought in the stock market as an intangible or in physical form. Those who prefer to have investments at home or in the safe deposit box of the bank usually buy gold coins, bullion or bars.
Gold bars and ingots, by law, are made of fine gold of almost extreme purity, called.999. Normally, its weight varies depending on the format and is usually measured in troy ounces or grams. To give you an idea, one troy ounce is equal to 31.1034768 grams. Therefore, a kilo of gold would be equivalent to 32.1507 troy ounces.
After looking at this data, we are going to delve into this topic a bit more to understand how the gold market works and which format is the best to invest in.
Table of Content
- What is the Troy ounce?
- How is the price of gold calculated in the world?
- How much does a gold bar weigh?
- What is the value of gold as an investment?
- Frequently Asked Questions About The Weight, Value And Legitimacy Of Gold Bullion
What is the Troy ounce?
The Troy ounce (ozt) is an imperial measure that has been used for many years to measure the mass of gold and other precious metals, such as silver, for example. This is the preferred unit of weight for calculating and displaying the market price of gold, whether expressed in dollars, euros, or any other currency.
It is important to note that an ounce is not the same as a troy ounce, as these are different concepts that are also used in different scenarios. But where does the custom of measuring gold in ounces come from? Actually, it dates back to very ancient times. This way of calculating the weight, mass and price of gold comes from the Roman Empire and was replicated by the British Empire.
Note: You may be interested to know that the market has a “golden rule”. Typically, the price of an ounce of gold rises between $100 and $150 every 4-5 years, although in difficult times it can skyrocket, such as today. For the month of January 2020, the ounce of gold was positioned at $1,523.10, while at the end of July 2020 it reached $1,960.25 per troy ounce, that is, it was revalued by more than 28%.
Fun fact: Gold was the preferred backing standard of the financial world and it was that way until 1971. From this date, the United States decided to abandon the gold standard, that is, the insurance or backing of its reserves in dollars. At the time, one dollar was equal to 1/35th ounce of gold.
How is the price of gold in the world calculated?
For centuries the gold price fixing scheme fell to the London Gold Pool. Why? Well, because it is precisely in London that the largest and most important gold market in the world is found. In fact, it is in the London market that the spot price of gold is currently calculated. It is estimated that at least 6.5 thousand tons of gold are stored in London and in some of the most important London banks.
To give you an idea of the importance of this market, some 5,500 tons of gold are traded in London every day, 600 times more gold than is extracted worldwide on that same day. Being the largest and most important market in the world, in addition to the center of the LBMA (which is the Free Bullion Market Association of London), it is understandable that they are responsible for calculating and disseminating the spot price.
How much does a gold bar weigh?
It depends on the format. The smallest bars, often called gold bars, are compact and so small that they are often purchased for wedding or birthday gifts. This small ingot, which is perhaps one of the most traded by average consumers, has a weight of one gram, that is, 0.0322 troy ounces.
Note: One gram gold bars are also usually the most expensive. Why? Because its processing cost is higher. In fact, some experts estimate that their value is at least twice the amount of gold they contain.
Now, the standard size and weight of a gold bar, with the Good Delivery denomination, is 7” x 3 ⅝” x 1 ¾” (or what would be the same, 17.78 x 9.21 x 4.45 cm) and has a weight of 400 troy ounces (12.4414 kg). This is the standard measurement used in the New York Comex gold trading.
It is important to note that this weight of 400 troy ounces is not exact. For example, in England, gold bullion typically weighs about 25 pounds, which is about a little over a kilo difference compared to the established 400 troy ounces in the US market.
However, most banks worldwide have established that gold bars in the 400 troy ounce denomination must contain between 350-430 ounces.
Important: Keep in mind that those 80 Troy ounces of difference matter, and a lot! Currently, we would be talking about a difference in value of $156,800. Our recommendation? If you are going to buy a bar, check – in addition to its purity and the authenticity of the engravings – the weight of the bar because you could lose a lot of money if you pay 430 troy ounces and only receive 350.
The new gold bar weight standard in the 21st century
Currently, the buying and selling and demand for gold by China has influenced the standard of how much a gold bar weighs, mainly because traders and investors in this country prefer a smaller size that is more convenient to transport. In fact, in China they opt for one kilo gold bars instead of the classic 400 troy ounces (+12 kg). This would translate to an amount of 32.1507 troy ounces of gold, or about $63,000.
But why is this standard being imposed worldwide? For various reasons. First, the format and size of this one kilo ingot is easier to store. The insurance costs less as well as the spot price and associated commissions. If you want to sell the ingot, it will be much easier to market it in one kilo formats instead of 12 kilos or more. This allows savers, that is, regular consumers, to also access the gold market.
All things considered, it’s much easier for the average family to buy a one kilo gold bar for just over $63,000 than a 400 troy ounce bar for $784,000, right?
Note: Remember that China is currently the country that leads the gold jewelry market. In 2015 alone, they traded around 750 tons of gold in jewelry.
Tip: You can also choose to invest in gold using an investment app, either by looking directly at the gold or at the mining companies.
What is the value of gold as an investment?
For years, physical gold as an investment has become a stable and risk-free (although not so free) way to save or secure savings. Remember that the value of gold does not tend to decrease, but to remain above inflation. It is also not affected by falls in the dollar or the euro, quite the opposite. These types of financial crises strengthen it.
If you want to know the price of a troy ounce instantly, go to goldprice.org. The pandemic has had a significant impact on the price of gold worldwide. Of course, you don’t always have to buy physical gold to invest in it. Exchange traded funds (ETFs or Exchange Traded Funds), investment funds, certificates and warrants are also a good option.
Frequently asked questions about the weight, value and legitimacy of gold bullion(Bullion is non-ferrous metal that has been refined to a high standard of elemental purity.)
If you still have doubts, don’t worry! We have put together some frequently asked questions from those investors who are just getting started in the world of buying and selling gold as an investment:
Why is it said that the value of gold does not depend on the value of the dollar?
Although the price of gold is shown on exchanges worldwide in dollars (and sometimes euros) it is decoupled from the market value of those currencies. Why? Because in general, the usual thing is that banks and countries support the money they declare to have in their vaults with gold reserves.
To give you an idea, countries that follow the gold standard have: 1) a number of gold bullion reserves and 2) a number of dollars (or other legal tender) in circulation. Ideally, the dollar value of that country’s gold reserves matches the amount of money on the street , so to speak, whose technical mintage is “monetary mass.” When the amount of money a country issues is greater than its gold reserves, it will generate inflation.
Now, this gold standard has been losing strength after the First World War, although some countries, banks and financial institutions continue to implement it today.
Note: If you have little money to invest in gold, you can still try to multiply it. Opening a high-yield savings account to store your reserve fund, trading Treasury bonds, or getting into the mutual fund business could all be great alternatives to buying gold as an investment.
Tip: You can check the fluctuation in the value of gold from the exchange or by using a trading application, such as TradingView. The gold/ dollar index is identified by the denomination XAUUSD.
Are there only 400 Troy ounce gold bars?
Actually, no. However, 350-430 Troy ounces are the most popular sizes. Good Delivery bars come in various formats. The most traded among beginning investors are the following:
|Best-selling formats of Good Delivery gold bars (0.999 or 24K)|
How to determine the veracity of a gold bar?
Before you buy your bullion, make sure of the following :
- That has the phrase “Fine Gold”
- That has the denomination 999.9 or.999
- Must show an engraving on the back with the manufacturer’s stamp
Some formats also indicate how much the gold bar weighs in grams or troy ounces, a serial number, and the country of provenance, as is often the case with Münze Österreich gold bars from Austria.
Note: Regardless of what the store selling it to you tells you, check how much the gold bar weighs with a precious metals or jewelry scale.
You don’t want to pay more when you’re getting less. If you plan to buy online, do it in certified stores recognized for their history. Avoid auction sites like eBay, but if you want to buy there, check that the seller is highly rated and not negatively rated for:
1) Gold Legality,
2) Authenticity or Purity,
3) Shipping Costs,
4) How much does a Gold Bar Weigh.