Understanding the Importance of Gold Weights
Monday, January 25th, 2010Gold is used in many industries such as electronics, medicine and energy in addition to being used in many consumer products such as jewellery, cosmetics and consumer electronics. Aside from these uses it also plays an important role in economies throughout the world both historically and in the present. In the past it has been used by many countries as a form of currency and it is still very much traded as a commodity on the market.
Because gold has played an important role in the economies of the world and present day trading, how gold is weighed is very important. Having standard weights allows for easier trading and builds confidence in gold which is essential to a fluid gold market.
Gold Bar
The most common method of holding commodity gold is as a gold bar. The value of a gold bar depends on its weight which will be decided by whether the gold is going to be used as for trading or as a long term investment. Gold bars are ingots which are available in a variety of sizes and weights. Gold bars fall into two categories – cast gold bars and minted gold bars.
Cast Gold Bars
Cast gold bars are created by melting down the gold and pouring the gold into various different moulds to give the bars different shapes and weights.
Minted Gold Bars
Minted gold bars are created by hand cutting gold blanks to precise measurements.
Whether the gold bar is minted or casted the weight and purity is engraved on the top of the bar so that the value of the gold is known. In grams, there are sixteen international weight categories which can be used to create gold bars, which range from five hundred grams to a third of a gram. In ounces, there are eight weight categories, which range from twenty ounces to less than an ounce.
Banks and Traders Measures and Purity Levels
The most common bar which banks hold is the 400 ounce gold bar. It should be noted that these bars actually range from 350 and 430 ounces, but the exact weight is always engraved on the gold bar. Gold bars which are held by banks are almost always of a 99. 5 percent purity level. In addition to these bars banks also store in 1 tonne bars, 1 tola bars or 10 tola bars.
The most commonly traded gold bar across the world is the kilogram bar. Traders and investors use this weight because it does not sell at a premium price and is cheaper than alternative.
Gold Standards
Bullion spot trading is a form of gold trading where the physical gold bars actually changes hands in a transaction. The standard gold bar which is used for this is the London Good Delivery gold bullion bar. This gold bar weighs 400 ounces and because is it so frequently traded it is the most important gold bar in the world.
Gold bars can be denominated in different weights around the world. Internationally, they are weighed in grams while in many English speaking countries including the UK; they are mostly weighed in ounces. In the Asian and Middle Eastern region, they are mostly weighed in tolas.
Nowadays, gold has become an increasingly attractive investment as gold prices are rising, and have reached their all time high this year. When prices rise, this brings profits to gold investors and sellers.
