Gold or silver items have many different weights depending on what is being measured and the purpose. First, some terminology definitions:
|Gross||total weight as registered by a scale|
|Fine||gross weight multiplied by purity|
|Actual||true, factual or real amount|
|Nominal||deemed, defined or assumed amount|
The above results in four weights:
|Actual Gross||total real scale weight|
|Nominal Gross||Actual Gross rounded up/down|
|Actual Fine||Actual Gross multiplied by actual purity|
|Nominal Fine||Nominal Gross multiplied by nominal purity, or Actual Fine rounded up/down|
Actual weights are mostly used in the manufacturing process whereas nominal weights are often used to standardise or simplify weights when selling/trading gold and silver coins and bars. The reason nominal is needed because manufacturing processes result in small variations – it is not possible (or often cost effective) to produce exact weights as per the product specifications. If you weighed a coin or bar with a very precise scale you would find they all have slightly different weights (although all will be above the specification weight) resulting from normal variations in manufacturing.
For example, a 10oz gold bar, if weighed and assayed accurately may show a actual gross weight of 10.0003oz and a purity of 99.9876%, giving an actual fine weight of 9.9990599628oz. Needless to say, if one operated this accurately for every bar it would make recording and trading very complicated. As a result, a 10oz gold bar is given the following nominal weights:
Gross – 10.000oz
Purity – 99.99%
Fine – 9.999oz
Another example of nominal weights is the London gold market specifications for good delivery bars. These have their gross weight rounded down to the nearest 0.025 of an ounce. The reported weight in bar lists is therefore a nominal gross weight, with the fine weight calculated from this and not the actual gross weight.
A common reaction to use of nominal weights is that it disadvantages one party to the trade. In the 10oz gold bar example, the customer is only paying for 9.999oz of gold and the seller loses as they have “given away” 0.0000599628 ounces. This is true, but note that when selling that bar later, the owner is only going to get 9.999oz and not 9.9990599628oz. The industry works on the basis that what one gives up on day, one will receive back another day. It is also worth noting that these “give aways” are also very small in dollar terms.
However, for a large net seller like The Perth Mint, these “give aways” can add up to a significant cost and our manufacturing staff are constantly working to reduce them.