On the heels of the Oscar awards, this TheStreet.com article, What’s an Oscar Worth in Current Gold Prices?, provides a fun look at the Oscar if it was made of gold bullion at today’s rates.
Except, their math seems a little bit off.
Remember, gold bullion weights use the troy ounce not the avoirdupois ounce. Food and bathroom scales use the avoirdupois system of ounces and pounds where 16 ounces equals one pound. In the troy system, 12 troy ounces equals one troy pound.
In comparison, one avoirdupois ounce equals 0.911458333 troy ounce. Perhaps the easiest way to view their comparison is in grams: one avoirdupois ounce equals 28.35 grams whereas a troy ounce weighs 31.1 grams.
In their article on the Oscar, TheStreet.com gives the value of the Oscar at $155,720 based on a gold price of $1145 per ounce. Dividing $155,720 by $1145 equals 136 ounces. Divide 136 by the statue’s weight of 8.5 pounds equals 16.
Since a troy pound contains only 12 troy ounces, their math shows they have mixed their calculation using a price per troy ounce applied to an avoirdupois weight.
Let’s perform the Oscar gold value calculation starting with the statue’s weight in avoirdupois pounds, translate to troy ounces and determine the gold value based on $1145 per ounce.
8.5 pounds multiplied by 16 ounces equals 136 avoirdupois ounces. One avoirdupois ounce equals .911458333 troy ounces. 136 multiplied by .911458333 equals 123.958333 troy ounces.
123.958333 troy ounces multiplied by $1145 per troy ounce of gold equals $141,932.
So, an Oscar would not be $155,720 if made of solid gold at $1145 per ounce. Instead, it would be $141,932.
Perhaps the gold market would be less confusing if the resources publishing prices used the “ozt” terminology for the troy ounce.
Just a thought.
TheStreet.com article goes on to say, “If you want to invest in gold, winning an Oscar might not be the easiest or most profitable way. Most gold advisers recommend physical bullion, which is levered to the spot price not the paper futures market.”
What a fun article even including the mixing and matching of price per troy ounce applied to avoirdupois ounces…