Gold Price Per Gram: How to Work It Out Yourself

Almost every headline gold price you see is quoted in US dollars per troy ounce. Yet outside of the bullion coin market, gold is bought, sold and taxed by the gram across most of Europe, Asia and the Middle East. If you hold a 100 gram bar, a 20 gram cast bar or a handful of gram-denominated pieces, the number on the news is not directly useful to you. This guide shows you how to get from one to the other, and where people most often go wrong.

The one number you need: 31.1034768

A troy ounce is not the same as the ounce used to weigh food. One troy ounce equals exactly 31.1034768 grams, whereas a standard avoirdupois ounce is about 28.35 grams. That is roughly a ten per cent difference, which is more than enough to turn a fair price into a bad one if you use the wrong figure.

To convert a spot price to a per-gram price, divide by 31.1034768. If gold is quoted at $3,110 per troy ounce, the per-gram spot price is approximately $100.00. To go the other way, multiply the per-gram figure by 31.1034768.

• Price per gram = spot price per troy ounce ÷ 31.1034768
• Price per kilo = price per gram × 1,000
• Price per troy ounce = price per gram × 31.1034768
• Never use 28.35 — that is the wrong kind of ounce

Purity: the step most people skip

Spot prices refer to pure gold. A one ounce American Gold Eagle contains one troy ounce of fine gold but weighs more than an ounce overall, because it is alloyed with copper and silver for durability. A 22 karat sovereign, by contrast, contains 7.32 grams of fine gold in a coin weighing 7.98 grams.

The rule is simple: multiply the gross weight by the fineness to get the fine gold content, then value that fine content at spot. A 10 gram bar at 999.9 fine contains 9.999 grams of gold. A 10 gram piece of 18 karat jewellery contains only 7.5 grams of gold, because 18 karat is 750 parts per thousand.

• 24 karat = 999 or 999.9 fine = essentially pure
• 22 karat = 916.7 fine (sovereigns, Krugerrands, Eagles)
• 18 karat = 750 fine
• 14 karat = 585 fine
• 9 karat = 375 fine

A worked example

Suppose spot gold is $3,110 per troy ounce, giving a per-gram spot of about $100.00. You are offered a 50 gram cast bar stamped 999.9. Its fine gold content is 49.995 grams, so the pure metal value is roughly $4,999.50. A dealer selling that bar might ask $5,150, which is a premium of about three per cent — reasonable for a cast bar of that size.

Now take a 50 gram lot of 18 karat scrap. The fine content is 37.5 grams, worth about $3,750 at spot. A refiner will not pay you spot; they will pay a percentage of it to cover assay and refining, often between 85 and 95 per cent depending on the volume and the relationship. Knowing the underlying number is what lets you judge whether an offer is fair.

Currency conversion compounds the confusion

If you buy in euros, pounds, rupees or New Zealand dollars, there is a second conversion on top of the weight conversion. The dollar gold price can be flat while your local gold price rises, purely because your currency weakened. This is one of the least understood aspects of holding bullion: for many investors outside the United States, a meaningful share of returns over the past two decades has come from currency movement rather than from gold itself.

When you are comparing dealer quotes, always convert everything to the same currency and the same unit before you decide. Comparing a per-gram quote in euros against a per-ounce quote in dollars in your head is how mistakes happen.

Let the maths happen automatically

BullionTally does all of this for you. The built-in metals calculator takes any weight in grams, kilograms or troy ounces, applies a karat setting from 24K down to 9K or a custom fineness, and values it at the live spot price in any of 153 currencies. Add a piece to your portfolio and it revalues automatically every time spot moves, so you never have to reach for a calculator again.

You can also check the current figures on our live gold price page, which shows the spot price per gram, per troy ounce and per kilogram side by side.