Gold bullion refers to gold in the form of coins or bars. The key concepts relating to valuing gold bullion are explained below.
Gold Weight
The weight of gold bullion (including non-gold impurities) is measured in grams or kilograms.
Gold Purity
Gold purity refers to the proportion of the bullion weight that is gold. Purity is measured in fineness or carats. Fineness is expressed in parts per 1,000 (eg 999.9) or as a percentage (eg 99.99%). Carats are expressed in parts per 24 (eg 22).
Gold Content
Gold content is measured in troy ounces. 1 troy ounce equals 31.103 grams.
Be aware that troy ounces (toz) weigh slightly more than normal (avoirdupois) ounces (oz).
Gold Content (toz) = Bullion Weight (g) X Purity (%) / 100 / 31.103
Gold Value Calculation
The gold price is expressed in pounds per troy ounce (£ per toz). When valuing bullion you only need to consider the gold content, not its total weight.
Gold Bullion Value (£) = Gold Content (toz) X Gold Price (£ per toz)
eg What is the value of a 1Kg 0.9999 fine gold bar, if the gold price is £2,000 per troy ounce?
Gold Content = 1000 X 99.99 / 100 / 31.103 = 32.15 toz
Gold Bullion Value = 32.15 X 2,000 = £64,300
Any bullion dealer’s fee will usually be applied to this figure as a %.