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This blog discusses The Perth Mint's bullion coins and bars, providing information about our latest designs, mintages, sales volumes and sell outs. On a broader front, we share relevant research and opinions for anyone interested in gold and silver bullion investing.

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Troy ounce vs ounce: What’s the difference?

Topics [ buy gold online gold trading ]

The precious metals industry uses the troy ounce as its basic unit of measure, even in countries which have adopted the metric or imperial systems. 

While there is a difference between a troy ounce and the more common avoirdupois (imperial) ounce, the precious metals industry often uses ‘ounce’ and the abbreviation ‘oz’ rather than ‘troy ounce’ and ‘ozt’. So when you see ‘ounce’ and ‘oz’ used in the context of precious metals, assume the reference is to troy ounces.

We explore the origins of this ancient system - and why it’s still in use as the standard gold measurement today. 

Did you say champagne?

The troy ounce has its origins in the city of Troyes, located in the Champagne region of France, an ancient city with a fascinating history. For example, the Knights Templar emerged there in the 12th century. 

Standing at a hub on an extensive network of Roman roads, the city became a “formidable place for commercial exchanges”.

In the Middle Ages it hosted the largest and most important of the famous Champagne Fairs. Merchants from across Europe gathered in the city to trade their wools, silks, leathers, furs, spices, and, of course, precious gold and silver wares.

The Counts of Champagne, who prospered from this activity, introduced rules governing the efficient operation of the Fairs. It is said that the system of measuring gold, silver and gemstones first used in their region took its name from the city of Troyes.

 Troyes, ancient city in the Champagne region of France. Source: CC

The troy system was in widespread use as the basis of several European monetary systems by the end of the 12th century. It reached Britain under King Henry II, who reigned from 1154-1189 – the so-called Angevin monarch who also ruled large territories in France.

English pennies, worth 1/240th of a pound sterling, also weighed 1/240th of a troy pound of sterling silver. With 20 ‘pennyweights’ the equivalent of one troy ounce, there were 12 troy ounces in one troy pound.

Despite the rise of avoirdupois weights (16 ounces = one pound) for everyday goods, it has remained customary to weigh and price precious metals in troy weights. 

Troy pounds and pennyweights fell from favour in the 19th century, but even when British legislation abolished other old weights and measures in 1963, the troy ounce survived for trade in precious metals.

As common as grain

The troy ounce and the avoirdupois ounce have in common the grain, the smallest unit of mass in everyday use. But they’re not the same. 

At 480 grains, the troy ounce is heavier than the avoirdupois ounce, which weighs 437.5 grains.

In metric terms, the troy ounce weighs 31.1034768 grams. The avoirdupois ounce is slightly less, at 28.349523125 grams.

When referring to large quantities (such as annual mine production), the industry often uses metric tonnes as the unit of measure as it produces smaller and more manageable numbers. 

For example, 80,376,867 troy ounces equals 2,500 tonnes. Some prefer to use ‘millions of ounces’ (abbreviated to ‘moz’) to avoid confusion as to whether the ‘ton’ referred to is a metric ton, Imperial (long) ton or US (short) ton. 

For silver, traders can use the Indian unit of measure Lakh (or Lac) which refers to 100,000. For example, a trade for 1,000,000oz would be referred to as 10 Lakh.

Precious metal weights are usually only recorded to three decimal places of accuracy, or to one thousandths of an ounce. An exception to this is a gold London Good Delivery Bar, which is rounded down to the nearest 0.025 of a troy ounce (silver London Good Delivery Bars are rounded down to the nearest 0.100 of a troy ounce).

The table below lists conversion rates between a troy ounce and other common units of mass.

Buy gold and silver bullion 

The weight of gold and silver bullion bars and coins made by The Perth Mint are all specified in troy ounces. 

If you’re considering buying precious metals for the first time and are not entirely sure what this means, here’s what you really need to know:

• The weight and purity of every ounce of Perth Mint gold and silver is guaranteed by the Government of Western Australia.

• We offer a range of sizes from 1oz (troy ounce) to 1 kilo gold and silver coins and bars.

• Buy in-store from our bullion trading desk or online 24/7 for delivery.

• Alternatively, store your precious metals in our network of central bank-grade vaults.

Learn more about gold and silver weights and measurements here.

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What is 'conflict-free' gold?

Topics [ responsible gold gold refining gold refinery gold trading gold ]

Since 2006 when Leonardo Di Caprio’s hit feature film Blood Diamond exposed the dark side of mining in east African countries rich in natural resources, the trade of precious stones, minerals and other commodities has come under increasing public scrutiny.  

Best evidenced by the growing number of ‘fair trade’ products worldwide, this global concern with ethical sourcing is steadily on the rise as consumers and organisations become increasingly focused on corporate transparency, responsible supply chain management and sourcing. 

While huge leaps have been made in recent years in the prevention of conflict mining, it remains a global issue – particularly for gold. In response, leading industry players including The Perth Mint have implemented strict supply chain policies as part of their commitment to responsible metals. 

Conflict minerals

Investigations into revenue obtained from the trade in natural resources including gold, tin, tantalum and tungsten in the Democratic Republic of Congo (DRC) and neighbouring countries identified links to organised crime and the finance of corrupt officials and organisations.

In fact, of these ‘conflict minerals’, gold is considered the least controlled due to its high worth and the ease at which it can be moved across borders. The DRC government estimates that while more than 20 tonnes of gold are extracted by artisanal miners each year only about 10,000 ounces are officially exported. Meanwhile, it is estimated that more than half of Congo’s artisanal miners are exploited by local armed groups and non-state security forces present at gold pits around the country. (IPIS Research, 2015.)

In 2010 US Congress passed the ‘conflict minerals’ law which legally requires publicly-listed companies to check their supply chains and take steps to address any risks associated with procurement of these materials. Part of a wider move towards responsible sourcing, this was key in the development of an internationally recognised due diligence framework by the Organisation for Economic Cooperation and Development (OECD) which aligns with guiding principles outlined by the United Nations.

In 2012 the London Bullion Market Association (LBMA), one of the world’s largest distributors of precious metals to global markets, set up a Responsible Gold Guidance based on the OECD framework.

Dore bars

To be accredited as a LBMA ‘good delivery’ refiner and issued a LBMA Responsible Gold or Silver Certificate, refiners must undergo comprehensive yearly audits to ensure compliance with high standards of anti-money laundering and combating terrorist financing practices.

These include the establishment of systems and processes covering:

• Company management systems

• Identification and assessment of risks within the supply chain

• Management strategy to respond to identified risks

• Independent third-party audit of supply chain due diligence

• Supply chain due diligence reporting

As the fight against conflict gold and its global impact continues, the processes in place at The Perth Mint Refinery, as Australia’s only accredited LBMA refiner for both gold and silver, remain as relevant as ever for producer and investor clients around the world.       

Committed to responsible metals

The Perth Mint Refinery takes the risk and impact of handling precious metals mined within conflict affected areas extremely seriously.

“As the largest gold refiner in the southern hemisphere, we have a responsibility to do everything within our power to reduce the global impact of conflict metals,” Refining Operations Manager Nathan Edwards said. 

“We are aware that gold or silver mined in high risk countries has the potential to make its way to our refining operations in Western Australia. That’s why we’ve aligned our practices with the LBMA and OECD, to ensure we uphold and exceed global standards in due diligence and responsible sourcing.”

The Perth Mint was one of the first three gold refiners in the world to be certified under the internationally recognised Conflict-Free Smelter Program, now the Responsible Minerals Assurance Process (RMAP), which provides credible third-party valuation of a smelter's procurement activities.  

Our Responsible Metals and Supply Chain Policy is committed to ensuring all gold handled at The Perth Mint Refinery is obtained from conflict-free sources – from the moment it enters our high-security facility in Perth to when it leaves as 99.99% pure gold bars. 

Immediately after delivery, the origin of each batch is checked for compliance with our responsible metals policy before being weighed and entered into our barcoded metal deposit system. This facilitates tracking throughout the entire refining process.

For further information and to view our audit history, please visit our website.



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Who owns the world's gold?

Topics [ gold market gold analysis gold trading gold ]

USD 9.3 trillion: That’s the estimated market value of all the gold ever mined, just over 190,000 tonnes, based on an end of August 2019 gold price of USD 1,528.40 per troy ounce.
(Source: LBMA PM Gold Price

The owners of this gold fall into four broad categories:

Jewellery Buyers - This is the largest category of demand, accounting for almost 50% of gold ownership. Jewellery demand is predominantly driven by rising real incomes in Asia and the Middle East, where gold is seen as a form of wearable wealth.

Central Banks - Central banks own gold as part of their foreign exchange reserves. Collectively, central banks around the world own more than 30,000 tonnes of gold.

Investors - Investors buy gold in physical bar and coin form, as well as through depository services, such as those offered by The Perth Mint, and via Exchange Traded Products. It is estimated that in excess of 40,000 tonnes of gold are held by private investors worldwide.

Industrial Users - Gold is used in a range of industries from medicine and electronics to space technology. Industrial users are estimated to own more than 25,000 tonnes of gold.

Who buys gold now?

The annual GFMS Gold Survey offers a great insight into gold demand trends. In 2018, purchases of gold were as follows:

  • Jewellery demand was 2,129 tonnes
  • Bar and coin demand was 1024 tonnes
  • Central banks made net purchases of 536 tonnes
  • Industrial fabricators purchased 391 tonnes
  • Net flows into gold ETFs totalled 59 tonnes

Demand across the first eight months of 2019 has been driven by central banks, which continue to diversify away from the US dollar. This trend was perhaps best summarised by an August 27 Bloomberg article, Central Banks Just Love Gold and It’s Going to Stay That Way. The article focused on a report by Australian and New Zealand Banking Group (ANZ) which estimates net buying of gold by central banks will be more than 650 tonnes this year.

There is also increasing demand for gold ETFs which have built total holdings back towards 2013 levels.

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Asian Demand For Gold To Keep Rising - WGC

Topics [ gold trading invest in gold ]


Demand for gold in Asia, already growing before the mid-April price fall, will increase sharply in Q2 2103, the World Gold Council (WGC) predicted this week.

Indian gold imports are expected to reach 350-400 tonnes in the second quarter, 200% higher than a year earlier and almost half of last year's total imports.

‘Extremely elevated levels’ of gold imports from Hong Kong into China, which reached 160-170 tonnes in April alone, could end well up on expectations at 880 tonnes for the year.

In Market Update for Second Quarter 2013, WGC said that research carried out in May indicated that sentiment towards gold in the world’s two largest markets remained extremely positive, with 70% of consumers in India and China anticipating a stable or increasing price in the next 12 months.

The response contrasts with US investment markets, which saw 350 tonnes flow out of gold-backed ETFs between the start of the year and the end of April.

“Even if ETF outflows continue in the US, it is quite likely that the gold previously held in ETFs will find a ready market among Indian, Chinese and Middle Eastern consumers who are taking a long-term view on the prospects for gold,” managing director of investment, Marcus Grubb said.

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Gold Price “Recessions"

Topics [ gold trading silver gold ]


Bullion Vault’s Adrian Ash has a piece on the fact that gold has just recorded three monthly losses in succession. He notes that “three consecutive months of falling gold prices are rare however you count it. Since 1957 in fact, they've struck only 65 times in a total of 661 three-month periods.” Given its rarity, he says a “ ‘two months max’ [trading rule] made for a great signal to buy gold on pullbacks, most recently in Jan. 2010 (your last chance below $1100) and April 2009 (last chance below $900).”

Of course, past performance is never a guarantee of future performance and this “rule” is just a probability bet which requires ongoing investor and central bank buying to work, as Lawrence Williams indicates with this rhetorical question:

“… given the apparent liquidations out of gold ETFs and of long positions on COMEX coupled with supposedly fragile Indian and Chinese demand, how come the price is even managing to remain where it is? Can Central Bank purchases perhaps be running at a higher level than seen so far - certainly the March figures when known Central Bank buying accounted for 58 tonnes of the stuff suggests that this is indeed increasing.”

Download today’s full Blog Watch (pdf 271kb) for more reviews, including:


Is Dan Norcini correct in his King World News interview to interpret the 7500 gold futures contract “fat finger” trade as “yet another takedown attempt”?


Mineweb reports that Indian exports of silver jewellery to the US are up 52% in March compared to March 2011. What’s driving it?


Amine Bouchentouf at Hard Assets Investor website feels that gold stocks will continue to underperform gold bullion in 2012.


I’m a bit puzzled by what Natixis chief economist Evariste Lefeuvre (from FT Alphaville) says about AUD/GOLD and the S&P 500.

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Dark Inventory

Topics [ gold market gold prices gold trading ]


FT Alphaville observes that “something strange is going on with commodity inventories” as “official stocks are rising across numerous commodities, but analysts and traders swear fundamentals remain tight” with prices not falling, as would normally be expected in such a situation.

The explanation is that much of the inventory is being used “as collateral for bank loans. With financing for such trades relatively plentiful, traders say that only a fraction of the metal in bonded warehouses is available for sale.”

They feel that the “market may be under appreciating the influence of commodity encumbrance … giving rise to a situation whereby inventory is being withheld from willing buyers, creating something akin to an artificial squeeze” which will reverse at some point, pushing prices down.

This is news for commodities markets because as discussed yesterday, these markets usually have little in the way of inventory relative to new supply – unlike gold. I would thus characterise the fact that larger amounts of inventory are being withheld from the market means the affected commodities are becoming more “gold like” in terms of their supply/demand dynamics.

Blogger Chris Cook made a similar observation last year, concluding that “most commodity markets have become completely perverted by the entry into the market of a new breed of fund investors … passive 'inflation hedger' participants who are aiming to avoid loss, rather than actively seeking transaction profit.”

The effect of this financialisation “is that market participants who believe that market prices are actually set by producers and consumers are unaware that financial supply and demand are sending false signals” and in addition, such inflation hedging investors have to compete with firms who have “asymmetric knowledge about the Dark Inventory thereby created” by the financial products these firms operate.

FT Alphaville conclude that “massive pockets of concentrated wrong-way risk may be appearing as a result. Exactly not what the futures markets were invented for.”

Chris Cooks’ position is that this domination of a futures market by investors who hold massive stocks versus end producer/user volumes will not last, resulting in a price drop.

However, if

a)    the gold market has a 5,000 year history of investor demand dominating industrial uses; and

b)    that this will not change as 170,000t of stock isn’t going anywhere; and

c)    futures markets were not invented for this

then the conclusion is we should shut down all gold futures markets? It would certainly make many in the gold blogosphere happy, given the fat gold finger trade story included in today's Blog Watch.

Download today’s full Blog Watch (pdf 192kb) for more reviews, including:


Blogger The Fundamental View takes exception to the way this recent event was picked up by the gold blogosphere


On the issue of gold mining shares failing to perform relative to gold, Paolo Lostritto, mining equity research analyst with National Bank Financial has an interesting explanation.


Blogger The Short Side of Long sees gold and silver as “beautifully setup to be a contrarian trade of the year.”


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