Understanding units of measurement when taking out a loan against gold

When you take your gold to be valued by a gold buyer or when you go looking for gold loans at your local pawnbroker, you will often hear the term grams. This is a unit of measurement that is commonly used by those in the jewellery trade as the jewellery is measured by the gold price per gram. Another term that is commonly used when it comes to gold weight is troy ounce. Let’s begin with the troy ounce.

First of all, a regular ounce is 1/16th of a pound.  Ounce is a common measurement to weigh gold. However, when it comes to precious metals like gold, platinum and silver a troy ounce is used. This unit actually dates back to the ancient Roman system of measuring precious metals. A troy oz is 1/12th of a troy pound and is actually lighter than the regular ounce or pound. A single Troy ounce is equal to 31.1034 grams.

Pennyweights is another measurement which is an old English system of measuring the weight of gold. A troy oz of gold = 20 pennyweights. If 1 troy ounce = 31.1 grams then 1 gram is = 0.643 pennyweights (DWT). You may be fooled into thinking you are getting a good price for your gold if the price is based on pennyweights since a pennyweight is less than a gram. Dishonest gold dealers can use pennyweights to confuse you. You should always insist on seeing the scale when your gold is being weighed. Gold buyers will also perform an acid test or use the XRF machine in front of you so you see the findings yourself. It is important to have gold tested because sometimes god manufacturers mark gold a karat or two higher than what it really is. So, it is important to have gold tested regardless what karat is inscribed on the piece of gold itself, especially when you take your gold to a pawnbroker who offers gold loans.

The Pennyweight system is confusing to a lot of people and most buyers don’t really use the system. However, there are those who still do. Converting the gold price per gram to Troy ounces to pennyweights requires a lot of maths That’s a headache you can avoid by insisting that the person you are buying your gold from uses a unit of measurement you understand.

Pennyweights, grams, troy ounces are all units of measurement. It’s easier to find a scale that measures things in grams. However, if you are ever faced with a unit of measurement conundrum, for instance, if you had a 5 dwt of gold and 20 DWT =1 troy ounce and 1 troy ounce =31.1 grams then it follows that 20 dwt = 31.1 gram. Your 5 DWT of gold = 7.775 grams.

If 1 troy ounce is = 31.1grams then your 5 DWT of gold = 0.25 troy ounces.

If the spot price for gold is $2000 per troy ounce, then your gold is worth $500. This is the amount that will be used to calculate the loan a lender can give you. The long and short of is it does not matter the unit of measurement used, they should all get you to the same amount. You shouldn’t have to worry about the math, that is what calculators are for. Hope this guide helps with the gold price per gram.