How Does the Weight of a Precious Metal Relate to its Value?
It’s tempting to think every precious metal has a straightforward relationship with its value—but nothing could be further from the truth! Each precious metal has a unique relationship with its value determined by its purity. If you’re wondering how the relationship between weight and value differs with each precious metal’s purity, read on!Here’s a look at how the purity of three different types of precious metals affects the relationship between their weights and respective values.
Gold—like most other precious metals—is measured in “troy ounces.”
A troy ounce is about 31 grams and is a unit of measurement people have used specifically for precious metals since the Middle Ages. The value of a troy ounce of gold is currently around $1,860 for one troy ounce—but this is for 24-carat pure gold.
In comparison, gold that contains 16 parts gold to 8 parts alloy metal is considered 16-karat gold and will be worth less per troy ounce. One troy ounce of 16-karat gold is worth $1,240. Therefore, the relationship between the weight of gold and its value depends on the number of karats.
Unlike gold, silver is usually mixed with alloys to create silver sterling. Pure silver is worth around $22 per troy ounce—but this isn’t the same for 925 and 725 sterling silver.
925 sterling silver contains 92.5% silver and 7.5% other alloy metals, while 725 sterling contains 72.5% silver and 27.5% other alloy metals. 925 sterling silver is worth slightly less than $22 per troy ounce, while 725 sterling silver is even cheaper.
In simpler words, the sterling rating of silver affects the relationship between its weight and value.
Did you know the purity of platinum is denoted using a percentage? The highest-rated platinum available for purchase contains at least 95% platinum and 5% other metals like rhodium and silver. In comparison, 850 platinum contains 85% platinum and 15% other metals.
The higher the platinum rating, the more it’ll be worth in comparison to a lower-rated piece of platinum of the same weight. So, if you’re thinking of investing in platinum, it’s worth checking the rating before buying it!
If you’re seeking a precious metals exchange that offers precious metal coins, come see our team at Orion Metal Exchange. We offer some of the best gold coins for investment at fantastic prices and publish numerous articles on topics like how to invest in gold. We also sell silver, platinum, and palladium products for clients to help build up their precious metals IRA accounts.
Our team will tell you all about the benefits of investing in precious metals and securing your retirement with gold and silver. All you’ve got to do is leave us a message or give us a call at 1-800-559-0088.
We look forward to hearing from you soon!