The Incas referred to gold as the "tears of the Sun."

Homer,in the "Iliad" and "Odyssey," makes mention of gold as the glory of the immortals and a sign of wealth among ordinary humans. In Genesis 2:10-12, we learn of the river Pison out of Eden, and "the land of Havilah, where there is gold: and the gold of that land is good?"

As far back as 3100 B.C., we have evidence of a gold/silver value ratio in the code of Menes, the founder of the first Egyptian dynasty. In this code it is stated that "one part of gold is equal to two and one half parts of silver in value." This is our earliest of a value relationship between gold and silver.

In ancient Egypt, around the time of Seti I (1320 B.C.), we find the creation of the first gold treasure map now known to us. Today, in the Turin Museum is a papyrus and fragments known as the "Carte des mines d'or." It pictures gold mines, miners' quarters, road leading to the mines and gold-bearing mountains, and so on.

Where is that gold mine located? Well, you know how it is with treasure maps - there's always something a little vague about them, to throw you off the trail.

Modern thought is that it portrays the Wadi Fawakhir region in which the El Sid gold mine is located, but the matter is far from settled. Jason and the Argonauts sought the Golden Fleece around 1200 B.C.

That Greek myth makes more sense when you realize that the fleece that it refers to is the sheep's fleece used in the recovery of fine placer gold.

Early miners would use water power to propel gold-bearing sand over the hide of a sheep, which would trap the tiny, but heavy, flakes of gold. When the fleece had absorbed all it could hold, this 'golden fleece' was hung up to dry, and when dry would be beaten gently so that the gold would fall off and be recovered.

This primitive form of hydraulic mining began thousands of years ago, and was still being used by some miners as recently as the California gold rush of 1849.

The first use of gold as money occurred around 700 B.C., when Lydian merchants produced the first coins. These were simply stamped lumps of a 63% gold and 27% silver mixture known as 'electrum.' This standardized unit of value no doubt helped Lydian traders in their wide-ranging successes, for by the time of Croesus of Mermnadae, the last King of Lydia (570 -546 B.C.), Lydia had amassed a huge hoard of gold. Today, we still speak of the ultra-wealthy as being 'rich as Croesus.'

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A History of Gold and Silver

he following story is based on the historical outline by The National Mining Association

What is it about gold that when it was first found in the area of Eastern Europe, 4000 BC., a human being decided to pick it up? Long before it had become one of the most desired materials known to practically every culture around the world, something made the first person decide to reach down with their hand and collect it.

Perhaps it was the shine, color or shape. It might have been smooth or part of another mineral that had to be separated. This person could not have had any idea of the effect gold would have on humanity. They had no clue that men would work to find and purify this metal, or that they would collect large amounts of it and die to protect it as well as launch campaigns of war to get it from another group of people. They had no idea that some of the most beautiful art work ever made would be covered with this substance they now held in their hand.

It was the people in the area of the Transylvanian Alps or around Mount Pangaion in Thrace who first mined it and began to use it for decorative purposes. Being a decoration, it was appreciated probably because of it’s color and shine. It is so different from the plain dirt of the earth in color and texture. It is not like rocks, even the colorful ones because of it’s malleability. Gold shines even when it is not wet. It is not like some other metals in that it does not rust or change appearance. It seemed to be the perfect material for decorative purposes and indeed may have inspired the idea of decoration in the first place.

~~~~~~

After initial uses of gold had evolved, it’s decorative purpose began to have a more refined appearance. Maybe a man had the idea to create something that his wife would have liked or perhaps, his wife designed it herself and suggested it to her husband. This was not written down on the clay tablets used at the time, but rare examples of their work is found in museums around the world.

A sense of highly refined adornment was apparently the reason that the middle eastern mind of the people of the Sumer civilization in Southern Iraq, circa 3000 BC., began to make jewelry. They developed a skill and sophistication of design that is still in use today. Consider the repeating designs use in their modern architecture or carpets and how the designs loop through each other. Notice how the designs have balance and elegance.

Now, consider the elegance of a repeating loop of gold which creates a chain necklace. It is able to fall along the shape of a womans neckline, colar bone and chest. A solid wire of gold would not be able to do this, but the interlocking loops of gold allows the chain to move with the grace of the body and lay against the form. It also allows for movement when the body is in action. The beauty of gold against olive skin may be one reason to think that the idea came from the mind of a man, but no one knows for sure.

A sense of engineering and creativity had to be part of the puzzle in Iraq. There was a basic ability that was developed which is part of the beauty. The engineering of the chain allowed for the movement of the already malleable gold. It was adding another step to the dance that kept on developing as other people began to use gold and develop their own reasons and explanations for it’s being a part of creation.

~~~~~~~

When the Kings of Egypt began to utilize gold jewelry and take it with them to their graves, a new effect came into being. They had their belief in the afterlife and all that was needed for that, but it also left a picture of their culture and beliefs preserved in their art, which was rediscovered in relatively modern times.

In 2500 BC., Egyptian King Djer, of the first Egyptian Dynasty, had his gold jewelry buried with him in his tomb at Abydos, Egypt. He might have been the first, but was certainly not the last or most notable. The artifacts from the tomb of King Tut have traveled around to the worlds greatest museums. Millions of people have seen the golden treasures especially the gold canopic coffinette.

Storing gold in tombs may have seemed like the thing to do at one time, but as more value was given to gold, things changed. The graves of the Kings were plundered in the centuries after their burial, but some survived in tack, until the 1800′s, when research begins by European archeologist. We don’t want to call this “research” plundering, or do we? Lets say that it’s not plundering in the classical sense. At least the art work is not being melted down and sold in a pawn shop. It is on display in museums around the world.

Perhaps they didn’t find all the hidden rooms in the pyramids. There could be vast quantities of golden artifacts still waiting to be discovered. These rooms are still hiding from anyone who wants to gain entry. The builders made it more difficult to get to the valuable contents Who knows what is yet to be discovered in the hidden vaults of the pyramids? I’d be careful just in case the pyramids were designed to come crashing down on anyone who moves a certain stone which could be a door to the real vault.

~~~~~~~

Around 1500 B. C. Egypt became very wealthy in gold coming from Nubia. During this time, gold was becoming the medium of exchange among the nations of the middle east. The Shekel coin had a weight of 11.3 grams which was a standard weight. It was made of two thirds gold and one third silver.

After hundreds of years trading everything from goats and beans, to knives and hardware, a standard item that was acceptable to everyone had emerged. This item was gold. It was bound to happen that one thing would be so universally accepted so as to become money. They didn’t have mirrors at the time. Perhaps gold gave them a nice reflection of themselves?

No doubt, once it became the currency, it’s prestige rose unlike any other material. At one time, a man might have been judged rich by the amount of land or cattle he had. Perhaps it was the amount of power he had over others. All of this was changing in a way that was obviously more organized in spite of the pitfalls that were to follow.

~~~~~~

After the establishment of gold as money, there must have been a haphazard way of determining the value of a piece of material that may or may not be pure gold. This inconsistency allowed the purchaser to get more goods or services while using less actual gold since one could not see inside of a rock with a vein of gold. Sometimes it must have worked in favor of the seller as well.

In it’s natural form, gold might be in a solid nugget. It could be a vein in quartz or rock. If other materials were still mixed with the gold, the weight of the gold could not be accurately determined. It would have to be separated from other natural materials before it could be considered pure and be given an exact monetary value.

In 1350 BC, the Babylonians began to use fire assay to establish a test to purify gold. They could pronounce a certain purity of the gold. This gave more confidence in the use of gold as currency and no doubt helped build a trust in Babylonian gold as opposed to other regions where it might still have been mixed with other materials.

~~~~~~~

Gold has a softness that is unique among metals. It can be hammered down to very thin layers without splitting. It can then be used as a layer over wood, other metals or materials so that less gold is needed to cover the area in view. So instead of having a box of solid gold, it can be made of wood and covered with gold leaf, a very thin layer. The box will then look like solid gold.

In 1200 B.C., the Egyptians began beating gold into a thin layer. They also alloyed it with other metals some of which were harder. Mixing with other metals might change the color of the gold as well. The mixing of one metal with gold might give it more durability. Pure gold is soft and can be manipulated or scratched easily so adding other metals to give it more durability could serve a specific purpose depending on the intended use.

The Egyptians proved to be very creative and developed the lost wax method of jewelry making. This is done by carving the desired jewelry shape in wax, covering it in clay and heating it so that the wax is melted. The wax flows out of a small hole in the clay. As the wax leaves, the shape is ready for the melted gold to be poured into the mold created by the wax design. Once the gold is cooled and hardened, the clay mold is broken away from the gold jewelry formed by the lost wax.

~~~~~~~

Also around 1200 B.C., gold dust was recovered by people living on the eastern shores of the Black Sea. This natural shape of gold deposit is very small, sometimes as small as grains of sand and has to be recovered very carefully.

How the use of sheepskin came into use is unknown. After careful observation, they noticed that gold was heavier than the sand and therefore fell deeper into the wool, than sand. It could have been that someone dropped a skin in the water, which passed over it making deposits of gold. Later, someone found the skin, picked it up and after drying, noticed that there was gold embedded in the wool.

The use of sheepskin was deployed here by slucing the sands through the wool, which after drying are shaken to dislodge the gold dust. This worked well because the weight of the gold is heavier than the sand it was found in. As the sand and gold was dropped on the sheepskin, the water passed over it while moving through the stream. This pushed the light sand away while the heavier gold had more of a tendency to settled down into the thick wool of the unshorn sheepskin. Once the wool was dried, it was shaken out to free and collect the gold dust.

The Greek Mythological story of the “Golden Fleece” incorporates this form of gold gathering. Jason and the Argonauts go out searching for the Golden Fleece of the winged ram Chyrsomallos. The purpose of obtaining the fleece was to place Jason on the throne of Iolcus in Thessaly. The story was developed during the time of Homer (eighth century B.C.).

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The Chinese have always been great in business. They are creative, ordered and very industrious. As gold spread around the world as a form of currency, the Chinese began to use small squares of gold as a legal form of money. Uniformity of the squares encouraged an equal value to be traded. This happened in the year 1091 B.C.

Coins, as we know them today, were first made in 560 B.C., in Lydia, a kingdom of Asia Minor. A determined weight of pure gold was measured. Some sort of indent or stamp was used to identify the coins, perhaps of a governmental leader or mythological character. Imagine the person who came up with the idea to put the leaders face on a coin. he must have been considered a public relations genius of his day. People no doubt traveled from long distances to see if they could catch a glimps of the person whos face was on a gold coin.

Purity was determined by fire and the coins were poured into shape. The acceptance of gold was becoming more and more institutionalized by governmental action. This made trade easier in the area of Asia Minor which was the major crossroads of civilization at the time.

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In 344 B.C., Alexander the Great was in the midst of creating one of the largest empires in human history. Spoils of war were always part of the payment for the winners. The winner of the campaign was to possess large quantities of Persian gold. This was one of the early of a very long line of wars to be fought which included gold as spoils.

Alexander was a great military leader and no doubt enjoyed the spoils of war, but he was driven by more than that. He crossed the Hellespont with 40,000 men and defeated the Persians with brilliant tactics and the use of disciplined professional soldiers. There were more battles to win and much more gold to be had before Alexander was to die in his early 30′s.

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Gold was becoming more desirable. As was often the case, wars were fought with gold being a major motivation. Gold was hard to find. It was hard to purify and it was just a matter of time before it entered into the mind of man that it might be able to be manufactured in a laboratory.

Around 300 B.C., in the city of Alexandria, the mind of the Greeks and Jews could not be kept down. They must have figured that gold was manufactured by some combination of heat, metals or other combinations which found itself in nature. From this they began to practice alchemy whereby they took base metals and tried to turn it into gold.

Of course, they knew they would be wealthy beyond their wildest dreams, if they could do it. This lust for wealth did not allow them to consider that gold was valuable not just for its beauty, but for its rarity. If they could mass produce it, would it still be as valuable? Perhaps so, but even though this attempt was continued through the Dark Ages up to the Renaissance, it was never successful. God must have wanted gold to be difficult to obtain and therefore rare.

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Gold Historical Background

Gold has a long and complex history. From gold’s first discovery, it has symbolized wealth and guaranteed power. Gold has caused obsession in men and nations, destroyed some cultures and gave power to others. 

Archaeological digs suggest the use of Gold began in the Middle East where the first known civilizations began. The oldest pieces of gold jewelry, Egyptian jewelry, were found in the tomb of Queen Zer and of Queen Pu-abi of Ur in Sumeria and are the oldest examples found of any kind of jewelry in a find from the third millennium BC. Over the centuries, most of the Egyptian tombs were raided, but the tomb of Tutankhamen was discovered undisturbed by modern archaeologists. Inside, the largest collection of gold and jewelry in the world was found and included a gold coffin whose quality showed the advanced state of Egyptian craftsmanship and goldworking (second millennium BC).

The Persian Empire, in what is now Iran, made frequent use of Gold in artwork as part of the religion of Zoroastrianism. Persian goldwork is most famous for its animal art, which was modified after the Arabs conquered the area in the 7th century AD.

When Rome began to flourish, the city attracted talented Gold artisans who created gold jewelry of wide variety. The use of gold in Rome later expanded into household items and furniture in the homes of the higher classes. By the third century AD, the citizens of Rome wore necklaces that contained coins with the image of the emperor. As Christianity spread through the European continent, Europeans ceased burying their dead with their jewelry. As a result, few gold items survive from the Middle Ages, except those of royalty and from church hoards.

In the Americas, the skill of Pre-Columbian cultures in the use of Gold was highly advanced long before the arrival of the Spanish. Indian goldsmiths had mastered most of the techniques known by their European contemporaries when the Spanish arrived. They were adept at filigree, granulation, pressing and hammering, inlay and lost-wax methods. The Spanish conquerors melted down most of the gold that they took from the peoples of this region and most of the remaining examples have come from modern excavations of grave sites. The greatest deposits of gold from these times were in the Andes and in Columbia.

During the frontier days of the United States news of the discovery of gold in a region could result in thousands of new settlers, many risking their lives to find gold. Gold rushes occurred in many of the Western States, the most famous occurring in California at Sutter’s Mill in 1848. Elsewhere, gold rushes happened in Australia in 1851, South Africa in 1884 and Canada in 1897.  

The rise of a gold standard was meant to stabilize the global economy, dictating that a nation must limit its issued currency to the amount of gold it held in reserve. Great Britain was the first to adopt the gold standard in 1821, followed, in the 1870s, by the rest of Europe. The system remained in effect until the end of the first world war, after which the US was the only country still honoring the Gold Standard. After the war, other countries were allowed to keep reserves of major currencies instead of gold. The arrival of the great depression marked the end of the U.S. export of gold in the 1930s. By the mid 20th century, the US dollar had replaced gold in international trade.

The American Eagle Bullion program was launched in 1986 with the sale of gold and silver bullion coins. Platinum was added to the American Eagle Bullion family in 1997. A bullion coin is a coin that is valued by its weight in a specific precious metal.

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Abrief History Of Gold

A child finds a shiny rock in a creek, thousands of years ago, and the human race is introduced to gold for the first time.

Gold was first discovered as shining, yellow nuggets. "Gold is where you find it," so the saying goes, and gold was first discovered in its natural state, in streams all over the world. No doubt it was the first metal known to early hominids.

Gold became a part of every human culture. Its brilliance, natural beauty, and luster, and its great malleability and resistance to tarnish made it enjoyable to work and play with.

Because gold is dispersed widely throughout the geologic world, its discovery occurred to many different groups in many different locales. And nearly everyone who found it was impressed with it, and so was the developing culture in which they lived.

Gold was the first metal widely known to our species. When thinking about the historical progress of technology, we consider the development of iron and copper-working as the greatest contributions to our species' economic and cultural progress - but gold came first.

Gold is the easiest of the metals to work. It occurs in a virtually pure and workable state, whereas most other metals tend to be found in ore-bodies that pose some difficulty in smelting. Gold's early uses were no doubt ornamental, and its brilliance and permanence (it neither corrodes nor tarnishes) linked it to deities and royalty in early civilizations .

Gold has always been powerful stuff. The earliest history of human interaction with gold is long lost to us, but its association with the gods, with immortality, and with wealth itself are common to many cultures throughout the world.

Early civilizations equated gold with gods and rulers, and gold was sought in their name and dedicated to their glorification. Humans almost intuitively place a high value on gold, equating it with power, beauty, and the cultural elite. And since gold is widely distributed all over the globe, we find this same thinking about gold throughout ancient and modern civilizations everywhere.

Gold, beauty, and power have always gone together. Gold in ancient times was made into shrines and idols ("the Golden Calf"), plates, cups, vases and vessels of all kinds, and of course, jewelry for personal adornment.

The "Gold of Troy" treasure hoard, excavated in Turkey and dating to the era 2450 -2600 B.C., show the range of gold-work from delicate jewelry to a gold gravy boat weighing a full troy pound. This was a time when gold was highly valued, but had not yet become money itself. Rather, it was owned by the powerful and well-connected, or made into objects of worship, or used to decorate sacred locations.

Gold has always had value to humans, even before it was money. This is demonstrated by the extraordinary efforts made to obtain it. Prospecting for gold was a worldwide effort going back thousands of years, even before the first money in the form of gold coins appeared about 700 B.C.

In the quest for gold by the Phoenicians, Egyptians, Indians, Hittites, Chinese, and others, prisoners of war were sent to work the mines, as were slaves and criminals. And this happened during a time when gold had no value as 'money,' but was just considered a desirable commodity in and of itself.

The 'value' of gold was accepted all over the world. Today, as in ancient times, the intrinsic appeal of gold itself has that universal appeal to humans. But how did gold come to be a commodity, a measurable unit of value?

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Gold was among the first metals to be mined

Throughout the ages men and women have cherished
gold, and many have had a compelling desire to
amass great quantities of it—so compelling a desire,
in fact, that the frantic need to seek and hoard gold
has been aptly named “gold fever.”

Gold was among the first metals to be mined
because it commonly occurs in its native form, that is,
not combined with other elements, because it is beautiful
and imperishable, and because exquisite objects
can be made from it. Artisans of ancient civilizations
used gold lavishly in decorating tombs and temples,
and gold objects made more than 5,000 years ago
have been found in Egypt. Particularly noteworthy are
the gold items discovered by Howard Carter and Lord
Carnarvon in 1922 in the tomb of Tutankhamun. This
young pharaoh ruled Egypt in the 14th century B.C.
An exhibit of some of these items, called “Treasures
of Tutankhamun” attracted more than 6 million visitors
in six cities during a tour of the United States in
1977-79.

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The graves of nobles at the ancient Citadel

The graves of nobles at the ancient Citadel of
Mycenae near Nauplion, Greece, discovered by
Heinrich Schliemann in 1876, yielded a great variety
of gold figurines, masks, cups, diadems, and jewelry,
plus hundreds of decorated beads and buttons. These
elegant works of art were created by skilled craftsmen
more than 3,500 years ago.

Tutankhamun’s gold mummy case (photo by Lee Boltin).

Sketch of the so-called mask of Agamemnon, one of many gold
items from the tombs at Mycenae

Location of the Mahd adh Dhahab gold mine.

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The ancient civilizations

The ancient civilizations appear to have obtained
their supplies of gold from various deposits in the
Middle East. Mines in the region of the Upper Nile
near the Red Sea and in the Nubian Desert area
supplied much of the gold used by the Egyptian
pharaohs. When these mines could no longer meet
their demands, deposits elsewhere, possibly in Yemen
and southern Africa, were exploited.
Artisans in Mesopotamia and Palestine probably
obtained their supplies from Egypt and Arabia. Recent
studies of the Mahd adh Dhahab (meaning “Cradle of
Gold”) mine in the present Kingdom of Saudi Arabia
reveal that gold, silver, and copper were recovered
from this region during the reign of King Solomon
(961-922 B.C.).

(Below)
An air view of the Mahd adh Dhahab gold mine in Saudi Arabia.
Swarms of gold-bearing quartz veins (seen as long irregular
trenches at a) have been mined for gold and silver for more than
3,000 years. Some of the veins have been followed downward to
depths as much as 300 feet. Similar quartz veins lace the hill to the
right (b), but these veins are not rich enough to mine.
Lumps of charcoal (the remains of wood fires used to smelt the
metals) were recovered from ancient slag piles and dated by scientists
of the U.S. Geological Survey using the carbon-14 method.
Some of the charcoal is as much as 3,000 years old indicating that
the mine was active during the reign of King Solomon.
The Saudi Arabian Mining Syndicate worked the mine from 1939 to
1954, getting ore from below the ancient workings as well as from
an open cut (c) and from old surface dumps. The mill (far left) and
buildings were erected by the Syndicate.

Mahd adh Dhahab gold mine.

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The gold in the Aztec

The gold in the Aztec and Inca treasuries of Mexico
and Peru is believed to have come from Colombia,
although some undoubtedly was obtained from other
sources. The Conquistadores plundered the treasuries
of these civilizations during their explorations of the
New World, and many gold and silver objects were
melted and cast into coins and bars, destroying the
priceless artifacts of the Indian culture.
Nations of the world today use gold as a medium of
exchange in monetary transactions. A large part of the
gold stocks of the United States is stored in the vault
of the Fort Knox Bullion Depository. The Depository,
located about 30 miles southwest of Louisville, Kentucky,
is under the supervision of the Director of the
Mint.

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Gold in the Depository

Gold in the Depository consists of bars about the
size of ordinary building bricks (7 x 3.6 x 1.75 inches)
that weigh about 27.5 pounds each (about 400
troy ounces; 1 troy ounce equals about 1.1 avoirdupois
ounces). They are stored without wrappings in
the vault compartments.
Aside from monetary uses, gold is used in jewelry
and allied wares, electrical-electronic applications,
dentistry, the aircraft-aerospace industry, the arts, and
medical and chemical fields.

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The changes in demand for gold

The changes in demand for gold and supply from
domestic mines in the past two decades reflect price
changes. After the United States deregulated gold in
1971, the price increased markedly, briefly reaching
more than $800 per troy ounce in 1980. Since 1980,
the price has remained in the range of $320 to $460
per troy ounce. The rapidly rising prices of the 1970’s
encouraged both experienced explorationists and amateur
prospectors to renew their search for gold. As a
result of their efforts, many new mines opened in the
1980’s, accounting for much of the expansion of gold
output. The sharp declines in consumption in 1974
and 1980 resulted from reduced demands for jewelry
(the major use of fabricated gold) and investment
products, which in turn reflected rapid price increases
in those years.

Stacks of gold bars in the Fort Knox Bullion Depository
(photo courtesty of the U.S. Mint).

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Gold is called a “noble” metal

Gold is called a “noble” metal (an alchemistic term)
because it does not oxidize under ordinary conditions.
Its chemical symbol Au is derived from the Latin
word “aurum.” In pure form gold has a metallic luster
and is sun yellow, but mixtures of other metals, such
as silver, copper, nickel, platinum, palladium, tellurium,
and iron, with gold create various color hues
ranging from silver-white to green and orange-red.
Pure gold is relatively soft—it has about the hardness
of a penny. It is the most malleable and ductile of
metals. The specific gravity or density of pure gold is
19.3 compared to 14.0 for mercury and 11.4 for lead.

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Impure gold

Impure gold, as it commonly occurs in deposits, has
a density of 16 to 18, whereas the associated waste
rock (gangue) has a density of about 2.5. The difference
in density enables gold to be concentrated by
gravity and permits the separation of gold from
clay, silt, sand, and gravel by various agitating and
collecting devices such as the gold pan, rocker, and
sluicebox.
Mercury (quicksilver) has a chemical affinity for
gold. When mercury is added to gold-bearing material,
the two metals form an amalgam. Mercury is later
separated from amalgam by retorting. Extraction of
gold and other precious metals from their ores by
treatment with mercury is called amalgamation.

Recovering gold in a long sluicebox. Gold-bearing gravels are
shoveled into the upper end of the sluiceway; a series of riffles set
across the bottom of the box traps the gold. Myrtle Creek, Alaska,
circa 1900.

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Gold dissolves in aqua regia

Gold dissolves in aqua regia, a mixture of hydrochloric
and nitric acids, and in sodium or potassium
cyanide. The latter solvent is the basis for the cyanide
process that is used to recover gold from low-grade
ore.

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The degree of purity of native gold

The degree of purity of native gold, bullion (bars or
ingots of unrefined gold), and refined gold is stated in
terms of gold content. “Fineness” defines gold content
in parts per thousand. For example, a gold nugget
containing 885 parts of pure gold and 115 parts of
other metals, such as silver and copper, would be
considered 885-fine. “Karat” indicates the proportion
of solid gold in an alloy based on a total of 24 parts.
Thus, 14-karat (14K) gold indicates a composition of
14 parts of gold and 10 parts of other metals.
Incidentally, 14K gold is commonly used in jewelry
manufacture.

“Karat” should not be confused with “carat,” a unit of
weight used for precious stones.

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The basic unit of weight used in dealing with gold

The basic unit of weight used in dealing with gold
is the troy ounce. One troy ounce is equivalent to 20
troy pennyweights. In the jewelry industry, the common
unit of measure is the pennyweight (dwt.) which
is equivalent to 1.555 grams.
The term “gold-filled” is used to describe articles of
jewelry made of base metal which are covered on one
or more surfaces with a layer of gold alloy. A quality
mark may be used to show the quantity and fineness
of the gold alloy. In the United States no article having
a gold alloy coating of less than 10-karat fineness
may have any quality mark affixed. Lower limits are
permitted in some countries.

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No article having a gold alloy

No article having a gold alloy portion of less than
one-twentieth by weight may be marked “gold-filled,”
but articles may be marked “rolled gold plate” provided
the proportional fraction and fineness designations
are also shown. Electroplated jewelry items carrying
at least 7 millionths of an inch (0.18 micrometers) of
gold on significant surfaces may be labeled “electroplate.”
Plated thicknesses less than this may be
marked “gold flashed” or “gold washed.”
Gold is relatively scarce in the earth, but it occurs in
many different kinds of rocks and in many different
geological environments. Though scarce, gold is concentrated
by geologic processes to form commercial
deposits of two principal types: lode (primary)
deposits and placer (secondary) deposits.
Lode deposits are the targets for the “hardrock”
prospector seeking gold at the site of its deposition
from mineralizing solutions. Geologists have proposed
various hypotheses to explain the source of
solutions from which mineral constituents are precipitated
in lode deposits.

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One widely accepted hypothesis proposes

One widely accepted hypothesis proposes that many
gold deposits, especially those found in volcanic and
sedimentary rocks, formed from circulating ground
waters driven by heat from bodies of magma (molten

Mineralizing solutions travel upward along fractures and form
primary deposits.

rock) intruded into the Earth’s crust within about 2 to
5 miles of the surface. Active geothermal systems,
which are exploited in parts of the United States for
natural hot water and steam, provide a modern analog
for these gold-depositing systems. Most of the water
in geothermal systems originates as rainfall, which
moves downward through fractures and permeable
beds in cooler parts of the crust and is drawn laterally
into areas heated by magma, where it is driven
upward through fractures. As the water is heated, it
dissolves metals from the surrounding rocks. When
the heated waters reach cooler rocks at shallower
depths, metallic minerals precipitate to form veins or
blanket-like ore bodies.

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Another hypothesis suggests that gold-bearing

Another hypothesis suggests that gold-bearing
solutions may be expelled from magma as it cools,
precipitating ore materials as they move into cooler
surrounding rocks. This hypothesis is applied particularly
to gold deposits located in or near masses of
granitic rock, which represent solidified magma.
A third hypothesis is applied mainly to gold-bearing
veins in metamorphic rocks that occur in mountain
belts at continental margins. In the mountain-building
process, sedimentary and volcanic rocks may be

deeply buried or thrust under the edge of the continent,
where they are subjected to high temperatures
and pressures resulting in chemical reactions that
change the rocks to new mineral assemblages
(metamorphism). This hypothesis suggests that wateris expelled from the rocks and migrates upward,
precipitating ore materials as pressures and temperatures
decease. The ore metals are thought to originate
from the rocks undergoing active metamorphism

The gold content of rocks is commonly determined by means of a
fire assay, a method known to metalworkers for 3,000 years or
more. In modern practice, a weighed sample of pulverized rock is
melted in a flux consisting of lead oxide, soda, borax, silica, and
flour or potassium nitrate, along with a measured amount of silver
as lead-silver alloy, in a furnace at a temperature of 1000° Celsius
(1800°F). The lead fraction contains the gold and added silver and
settles to cool as a button. The button is then remelted and oxidized
in a bone-ash cupel, which absorbs the lead oxide, leaving
behind a bead consisting of precious metals in the silver collector.
The bead is dissolved in acid and usually analyzed by atomic
absorption spectrometry.

Gold nugget weighing 81.9 troy ounces from the Union Placer
mine near Greenville Plumas County, California (photo courtesy of
Smithsonian Institution).

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The primary concerns of the prospector

The primary concerns of the prospector or miner
interested in a lode deposit of gold are to determine
the gold content (tenor) per ton of mineralized rock
and the size of the deposit. From these data, estimates
can be made of the deposit’s value. One of the most
commonly used methods for determining the gold and
silver content of mineralized rocks is the fire assay.
The results are reported as troy ounces of gold or silver
or both per short avoirdupois ton of ore or as
grams per metric ton of ore.
Placer deposits represent concentrations of gold
derived from lode deposits by erosion, disintegration
or decomposition of the enclosing rock, and subsequent
concentration by gravity.

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Gold is extremely resistant to weathering

Gold is extremely resistant to weathering and, when
freed from enclosing rocks, is carried downstream as
metallic particles consisting of “dust,” flakes, grains,
or nuggets. Gold particles in stream deposits are often
concentrated on or near bedrock, because they move
downward during high-water periods when the entire
bed load of sand, gravel, and boulders is agitated and
is moving downstream. Fine gold particles collect in
depressions or in pockets in sand and gravel bars
where the stream current slackens. Concentrations of
gold in gravel are called “pay streaks.”

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In gold-bearing country

In gold-bearing country, prospectors look for gold
where coarse sands and gravel have accumulated and
where “black sands” have concentrated and settled
with the gold. Magnetite is the most common mineral
in black sands, but other heavy minerals such as cassiterite,
monazite, ilmenite, chromite, platinum-group
metals, and some gem stones may be present.
Placer deposits have formed in the same manner
throughout the Earth’s history. The processes of
weathering and erosion create surface placer deposits
that may be buried under rock debris. Although these
“fossil” placers are subsequently cemented into hard

 Laboratory researchers develop new methods of analyzing rocks
for gold content.

 rocks, the shape and characteristics of old river channels
are still recognizable.
The content of recoverable free gold in placer
deposits is determined by the free gold assay method,
which involves amalgamation of gold-bearing
concentrate collected by dredging, hydraulic mining,
or other placer mining operations. In the period when
the price of gold was fixed, the common practice was
to report assay results as the value of gold (in cents or
dollars) contained in a cubic yard of material. Now

results are reported as grams per cubic yard or grams
per cubic meter.

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Through laboratory research

Through laboratory research, the U.S. Geological
Survey has developed new methods for determining
the gold content of rocks and soils of the Earth’s
crust. These methods, which detect and measure the
amounts of other elements as well as gold, include
atomic absorption spectrometry, neutron activation,
and inductively coupled plasma-atomic emission
spectrometry. These methods enable rapid and
extremely sensitive analyses to be made of large
numbers of samples.
Gold was produced in the southern Appalachian
region as early as 1792 and perhaps as early as 1775
in southern California. The discovery of gold at
Sutter’s Mill in California sparked the gold rush of
1849-50, and hundreds of mining camps sprang to life
as new deposits were discovered. Gold production
increased rapdly. Deposits in the Mother Lode and
Grass Valley districts in California and the Comstock
Lode in Nevada were discovered during the 1860’s,
and the Cripple Creek deposits in Colorado began to
produce gold in 1892. By1905 the Tonopah and
Goldfield deposits in Nevada and the Alaskan placer
deposits had been discovered, and United States gold
production for the first time exceeded 4 million troy
ounces a year—a level maintained until 1917.

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During World War

During World War I and for some years thereafter,
the annual production declined to about 2 million
ounces. When the price of gold was raised from
$20.67 to $35 an ounce in 1934, production increased
rapidly and again exceeded the 4-million-ounce level
in 1937. Shortly after the start of World War II, gold
mines were closed by the War Production Board and
not permitted to reopen until 1945.
From the end of World War II through 1983,
domestic mine production of gold did not exceed 2
million ounces annually. Since 1985, annual production
has risen by 1 million to 1.5 million ounces every

Mining rich gold-silver at Goldfield, Nevada, circa 1905.

year. By the end of 1989, the cumulative output from
deposits in the United States since 1792 reached 363
million ounces.
Consumption of gold in the United States ranged
from about 6 million to more than 7 million troy
ounces per year from 1969 to 1973, and from about 4
million to 5 million troy ounces per year from 1974 to
1979, whereas during the 1970’s annual gold

production from domestic mines ranged from about 1
million to 1.75 million troy ounces. Since1980 consumption
of gold has been nearly constant at between
3 and 3.5 million troy ounces per year. Mine production
has increased at a quickening pace since 1980,
reaching about 9 million troy ounces per year in 1990,
and exceeding consumption since 1986. Prior to 1986,
the balance of supply was obtained from secondary
(scrap) sources and imports.

The main pit at the Carlin mine, Nevada, July 1974 (photo by
R.P. Ashley).

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Total world production of gold

Total world production of gold is estimated to be
about 3.4 billion troy ounces, of which more than
two-thirds was mined in the past 50 years. About 45
percent of the world’s total gold production has been
from the Witwatersrand district in South Africa.
The largest gold mine in the United States is the
Homestake mine at Lead, South Dakota. This mine,
which is 8,000 feet deep, has accounted for almost 10
percent of total United States gold production since it
opened in 1876. It has combined production and
reserves of about 40 million troy ounces.
In the past two decades, low-grade disseminated
gold deposits have become increasingly important.
More than 75 such deposits have been found in the
Western States, mostly in Nevada. The first major

producer of this type was the Carlin deposit, which
was discovered in 1962 and started production in
1965. Since then many more deposits have been discovered
in the vicinity of Carlin, and the Carlin area
now comprises a major mining district with seven
operating open pits producing more than 1,500,000
troy ounces of gold per year.
About 15 percent of the gold produced in the United
States has come from mining other metallic ores.
Where base metals—such as copper, lead, and zinc—
are deposited, either in veins or as scattered mineral
grains, minor amounts of gold are commonly deposited
with them. Deposits of this type are mined for the
predominant metals, but the gold is also recovered as
a byproduct during processing of the ore.

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Where most byproduct gold has come from

Most byproduct gold has come from porphyry
deposits, which are so large that even though they
contain only a small amount of gold per ton of ore, so
much rock is mined that a substantial amount of gold
is recovered. The largest single source of byproduct
gold in the United States is the porphyry deposit at
Bingham Canyon, Utah, which has produced about 18
million troy ounces of gold since 1906.
Geologists examine all factors controlling the origin
and emplacement of mineral deposits, including those
containing gold. Igneous and metamorphic rocks are
studied in the field and in the laboratory to gain an
understanding of how they came to their present
location, how they crystallized to solid rock, and
how mineral-bearing solutions formed within them.
Studies of rock structures, such as folds, faults,
fractures, and joints, and of the effects of heat and
pressure on rocks suggest why and where fractures
occurred and where veins might be found. Studies of
weathering processes and transportation of rock debris
by water enable geologists to predict the most likely
places for placer deposits to form.
The occurrence of gold is not capricious; its presence
in various rocks and its occurrence under differing
environmental conditions follow natural laws. As
geologists increase their knowledge of the mineralizing
processes, they improve their ability to find gold.

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