As of August 2020, 1 lb of gold is worth $2,574. This is based on the current gold spot price of $1,943 per ounce and the Troy Ounce conversion of 480 grains per ounce. The current gold spot price is down from its all-time high of $1,921 in September 2011 but is up from its recent low of $1,056 in December 2015.
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Troy ounces
One Troy ounce of gold is worth $1712.06 as of January 2020. This figure is calculated by taking the current spot gold price and multiplying it by 31.1035.
Purity
The value of gold is measured by its purity. The higher the percentage of gold, the more valuable it is. The most common purities for gold are 22 karats (917%), 18 karats (750%), 14 karats (583%), and ten karats (417%).
Gold is also traded in several other currencies, such as the U.S. dollar, the euro, and the British pound. The value of gold in each currency is based on the current exchange rate.
How is the price of gold determined?
The prices of gold are constantly changing and are determined by several factors. The most important factor is the current market price. Other important factors include the type of gold, the quality of the gold, and the quantity of gold.
Gold spot price
The gold spot is the current market price for one troy ounce (31.1 grams) of pure gold. The spot price is constantly changing, making it important for investors to stay current on the latest prices.
Gold spot prices are quoted USD (U.S. dollars) per troy ounce. To convert the per-ounce USD spot price to grams, divide by 31.1 (one troy ounce = 31.1 grams). So, if the current gold spot price is USD 1500 per troy ounce, that works out to be USD 48.08 per gram ((1500/31.1) = 48.08).
You can also use our gold price per gram calculator to do the math yourself. Enter the current gold spot price in USD (per troy ounce) and select ‘gram’ as your weight measurement. The calculator will automatically figure out the rest!
Gold futures
The price of gold is determined by trading in the futures market. Futures contracts are agreements to buy or sell a specified amount of a commodity at a certain price and date.
Gold futures are traded on various exchanges, the most common being the New York Mercantile Exchange (NYMEX) and the Tokyo Commodity Exchange (TOCOM). Prices are quoted in U.S. dollars per troy ounce.
The price of gold is determined by supply and demand. When the demand for gold is high, prices will increase. When demand is low, prices will decrease. Investors buy gold when they believe that other investments, such as stocks and bonds, are overvalued and may decrease in value.
How to invest in gold
Gold is a valuable precious metal that has been used as a form of currency, jewelry, and other decorative items for centuries. The chemical element gold is a dense, soft, shiny metal that is yellow. Gold is malleable, which means it can be beaten into thin sheets and is a good conductor of electricity.
Gold bars
Now that you know how to invest in gold, you may wonder what type of gold to buy.
There are many ways to own gold, but coins, bars, and ETFs are the most common.
Coins are popular because they are easy to trade and can be stored safely. They come in different weights and sizes, so you can choose the amount of gold you want to own.
Bars are larger and usually come in 1 oz, 10 oz, or 1-kilo sizes. They are more difficult to trade because they are not as divisible as coins but can be stored safely.
ETFs are exchange-traded funds that track the price of gold. They are easy to trade, but you will not own any gold.
Gold coins
Gold coins are one of the oldest and most popular ways to invest in gold. Unlike bullion bars, governments produce coins that carry a face value. Because of this, they are usually more expensive than bars and easier to buy and sell. The most popular gold coin in the world is the American Gold Eagle, which the United States Mint produces. Other popular coins include the Canadian Maple Leaf, the Australian Nugget, and the South African Krugerrand.
Gold mutual funds
A gold mutual fund is a type of fund that invests in gold. They are usually categorized as commodities, natural resources, or precious metals funds.
How do gold mutual funds work?
Gold mutual funds invest in gold mining, production, or exploration companies. These companies may be based in any country and may be involved in other activities.
What are the benefits of investing in gold mutual funds?
Gold mutual funds offer investors a way to gain exposure to gold without having to take physical possession of the metal. They also offer diversification benefits since they typically have low correlations with other asset classes, such as stocks and bonds.
What are the risks of investing in gold mutual funds?
Gold mutual funds are subject to the same risks as other types of Mutual funds, including market risk, sector risk, and management risk. In addition, gold prices can be volatile and may rise and fall sharply over short periods.
Gold ETFs
Gold exchange-traded funds are simple, gold-backed investment vehicles that trade like stocks on major stock exchanges. Like all ETFs, they offer investors a way to pool their money in a fund that tracks an underlying benchmark index. In the case of gold ETFs, that benchmark is the price of gold.
Gold ETFs have been around since 2003, but they came into vogue during the global financial crisis of 2008-2009. That’s because many investors view gold as a haven asset that can protect them from economic and geopolitical turmoil. Gold ETFs offer a convenient way to add gold exposure to your investment portfolio without taking physical possession of the metal.
There are several gold ETFs, but the two most popular are SPDR Gold Shares (GLD) and iShares Gold Trust (IAU). These two funds track very different indexes, but both seek to provide investors with exposure to the spot price of gold.
