A troy ounce (denoted on the stock exchange as t oz or ozt) is equal to 31.1034768 grams and is used as a measure of weight in the banking and jewelry industries when weighing gold, silver, platinum, palladium, and sometimes in the cosmetics industry to determine especially valuable components.
A troy ounce should be distinguished from a regular ounce - Avoirdupois Ounce, which is equal to 28.349523125 grams.
How the weight of precious metals is measured, and what does the grain have to do with it, in our new material on the Masterforex-V Academy Wiki.
History of measuring the weight of gold in ancient times
How to measure the weight of a product so that neither the seller nor the buyer is deceived?
Places like Karachi, New Delhi, Pakistan, Mumbai, Singapore and Nepal use the Tola system to weigh gold. Tola means weight and the name has its roots in Sanskrit. It weighs 3/8 troy ounce or 180 grains.
Ancient Babylon and the Sumerians gave a weight system consisting of shekels, minas and talents (1 talent consisted of 60 minas, and a mina consisted of 60 shekels). This weight system migrated first to Ancient Greece, and then to the Roman Empire, where the Roman talent already consisted of 100 pondus - pound (translated from Latin - weight). Each pondus consisted of 16 ounces (from the Latin uncia).
Painstaking calculations
In order to correctly and quickly convert an ounce of gold into grams, you can use one of the online converters that are available in sufficient quantities on the Internet. If you do not have the opportunity to use the World Wide Web or you are simply a supporter of traditional computing methods, you can do it yourself. To calculate the weight of a precious measure you will need a special formula:
(? oz) x (1 lb/16 oz) x (1 kg/2.2046 lb) x (1000 g/1 kg) =
Explanations of abbreviations used
| Abbreviations | Decoding | Weight |
| oz | ounce avoirdupois | 28.3 g |
| lb | pound avoirdupois | 453.529 g |
| kg | kilogram | 1000 g |
| g | gram |
Using this formula, you can find out how many grams of gold are in, for example, five or nine ounces:
5 oz x (1 lb/16 oz) x (1 kg/2.2046 lb) x (1000g/1 kg) = 141.749 g
9 oz x (1 lb/16 oz) x (1 kg/2.2046 lb) x (1000g/1 kg) = 255.148 g
Thus, to calculate the exact number of grams in this unit, you need to know the values of one avoirdupois ounce, kilogram, and avoirdupois pound in grams.
Weight measurement in the Middle Ages in Europe
As we see, all these pounds, ounces, libres were inherited by Europe from the Roman Empire, and were not at all invented by Henry III in England, as many observers write.
The city of Troyes in France, as a center of trade in the early Middle Ages, added the word troy to the ounce, and its weight was not the usual 16th part of a pound, but 12th part. Thus, a troy ounce is slightly heavier than a regular ounce. In addition, there was the Parisian ounce, the Dutch ounce, the Nuremberg ounce, the Bremen ounce, etc. That is, there were differences in ounce weight not only between countries, but also between cities!
But Henry III in 1266 legislated for the weight of an ounce - the weight of 640 pieces of well-dried wheat grains. According to this standard, later (already under Henry VII) official metal weights were created, which were kept in the Treasury in London and with which the royal assayers checked their weights. Copies of these standard weights were made and distributed throughout the English counties.
The Troy Ounce finally became the official unit of measurement for the gold and silver trade in London in 1527.
Troy ounce in the modern world
The metric system has been adopted almost completely throughout the world , however, in the precious metals market, the troy ounce is still the royal standard of purity and quality and continues to be the main unit of weight in their trade.
When trading on the stock exchange, to show that the weight of the metal is indicated in troy ounces, the symbol X is added to the name:
- palladium - XPD
- platinum - XPT
- silver – X AG
- gold – X AU
Example: online chart of the cost of a troy ounce of silver in US dollars.
XAGUSD chart courtesy of TradingView
Why are gold reserves needed?
The natural question is why are gold reserves so important? Why did this precious metal become the cornerstone in the emerging global economic system?
Firstly, the presence of significant gold reserves allows the state to maintain economic independence from other currencies. Secondly, gold is still one of the reliable investment options. Over the last decade alone, the value of this yellow metal has increased more than 5 times. In the event of an unstable economic situation in the domestic market of the state, threatening inflation of the national currency, gold will be able to serve as a kind of monetary equivalent recognized throughout the world.
Troy ounce and Forex
Today, many brokers can provide you with the opportunity to trade precious metals, which are also measured in troy ounces. The best of them, according to the Forex Academy Masterforex-V broker rating, are:
| Broker name | Year of foundation | Trading instruments | Licenses | |
| 1. | NordFX | 2008 | currency pairs, commodity futures, stock indices, cryptocurrencies, stocks | CySEC, MiFID |
| 2. | Swissquote | 1996 | commodity futures, currency pairs, stock index futures, cryptocurrencies, metals, ETFs, warrants, shares | FINMA, FCA, SFC, Dubai FSA |
| 3. | Dukascopy | 1998 | stock indices, commodity futures, currency pairs, stocks, bonds, ETFs | FINMA, FCMC |
| 4. | Alpari | 1998 | metals, energy, indices, currency pairs, cryptocurrencies | — |
| 5. | FxPro | 2006 | indices, commodity futures, stocks, currency pairs | FCA, CySEC, FSB, Dubai FSA, BaFin, ACPR, CNMV |
| 6. | Interactive Brokers | 1977 | stocks, bonds, derivatives, currency pairs, forward contracts, bills, warrants, options, stock indices, currency and commodity futures | NFA, CFTC, FCA, IIROC |
| 7. | Oanda | 1996 | bonds, stock indices, currency pairs, commodity futures | NFA, CFTC, FCA, IIROC, MAS, ASIC |
| 8. | FXCM | 1999 | currency pairs, stock indices, commodity futures, cryptocurrencies | FCA, BaFin, ACPR, AMF, Dubai FSA,SFC, ISA, ASIC, FSB |
| 9. | Saxo Bank | 1992 | currency and commodity futures, stock indices, currency pairs, ETFs, stocks, bonds, derivatives | Danish FSA, Consob, Czech National Bank, Bank of the Netherlands, ASIC, Monetary Authority of Singapore, FINMA, Bank of France, Central Bank of the UAE, Japanese Financial Services Agency, Securities and Futures Commission in Hong Kong. |
| 10. | FOREX.com | 1999 | currency pairs, stocks, stock indices, commodity futures, cryptocurrencies | NFA, CFTC, FCA, ASIC, JSDA, MAS, SFC |
| 11. | FIBO Group | 1998 | metals, energy, currency pairs, commodities, cryptocurrencies, indices | CySEC |
| 12. | FINAM FOREX | 1994 | currency pairs | Bank of Russia |
As we can see, the troy ounce remained in use for at least seven centuries and will probably continue to be used in the future.
Sincerely, wiki Masterforex-V - free (school) and professional Masterforex-V training courses for working on Forex, stock, futures, commodity and cryptocurrency exchanges.
XAUUSD Trading Strategies
One of the features of XAUUSD quote fluctuations, which can be taken as a basis when creating a strategy, is the rapid change of quotes within the range on any timeframe. The reason for this is the low liquidity of gold trading on the Forex market.
The fact is that the spot market is only available to professional investors due to the high margin requirements of the exchange. The main volumes are tied to it, while XAUUSD has a frankly weak order book, so almost any large transaction collects pending orders from a large number of levels.
A sharp rise in quotes and the subsequent response can serve as an excellent signal for a countertrend strategy
.
Candles that leave large tails in the direction of the local trend after closing are a reason to open a trade in the opposite direction.
The signal should be strengthened by a false breakout, in which the tail of the candle breaks the existing flat range. Working timeframe – H1.
The tail of the signal candle will determine the size of the stop loss, and the maximum range of the local trend (usually two or three candles) will determine the take profit level.
The impulsive nature of quote movement can be used in breakout and range breakout strategies. Basically, this tactic of work is designed for professionals who know how to determine the boundaries of a flat and place pending orders higher and lower. Momentum traders love gold for a reason)
In this case, the take level will be determined by the size of the flat range, and the stop will be located beyond one of its boundaries, opposite to the entry direction.
The best time for intraday trading is from 15-00 to 20-00 Moscow time. Once again, it is worth recalling that the concept of “night trading” in the form of flat strategies does not exist for gold.
Classic strategies for working with the trend are not available on small time frames; directional movements in gold are formed on daily candles. Before using them, you need to take into account the peculiarity of the high range of fluctuations; the tails of the candles require the use of a large stop size.
The same feature affects trading at levels that represent price zones; in the case of XAUUSD, a wider size is sufficient, unlike currency pairs.
To avoid “unnecessary” knocking out stop orders, you can use the “true volatility” ATR indicator to determine its size. This algorithm and various other rules for setting loss limits are described in detail in the topic “What you need to know about Stop Loss”.
