Why is it 100 oz and not one ounce?

100 ounces is the size of one contract, but the quote is in dollars per ounce. See the spec on CME and NYSE Liffe. Thus, one futures contract is for 100 ounces of gold, at 100 * $1174 = $117,400.

Similarly, for crude oil on the CME, the contract size is 1,000 barrels, but it's quoted in dollars per barrel. I don't know why FT shows the contract size for gold, and not for crude oil.

The contract size and the amount per quote differ because the the contract size is going to be what makes sense to actually trade. 100 oz is a standard size for gold bars, and people don't want to take delivery of a single ounce. It's easier for people to talk about the price of an ounce of gold though, as opposed to an arbitrary amount like 100 oz, which is really more of a detail. You see similar things for options, where it's quoted as the price per underlying share, but a contract is 100 options. So if a call option trades at $2.50, buying one contract costs $250, and is for 100 shares.

Gold bars historically weighed 100oz. That was a common quantity for purchasers. It is still a common quantity for futures contracts (though the two comments below point out that central banks storing bullion have standardized on the 400oz bar more recently).

Futures and spot contracts for commodities (such as precious metals) are set by the exchanges on which they are traded, and

  • some of those exchanges have existed for decades or centuries, and their rationales are lost to history,
  • the exchanges are not remotely concerned with dealing in quantities that the average retail investor considers reasonable; they care about their customers -- large agricultural conglomerates, investment banks, governments -- who trade in enormous quantities.

Prices as reported on websites or TV news, on the other hand, are meant to be accessible to the average lay person. Does it really help you or me to know that 5000 head of live cattle to be delivered in January 2015 are now selling for X million US dollars? No, we prefer to know that ground chuck costs $4.99 per lb at Walmart this week. Same thing with gold. Most people would prefer to know a unit price in terms of a weight of gold that they could actually afford.