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properties of gold

Physical amounts of gold

Density: 19,300 kg per cubic meter.

Melting point: 1337.33 K (1064.18 °C).

Boiling point: 3129 K (2856 °C).

Atomic number: 79.

Nuclear protons: 79.

Atomic weight: 197.

Nuclear neutrons (natural): 118.

The chemical properties of gold

Gold is a chemical element so it can only be found, not synthesized. It's pretty much inert, which means:- (1) it's almost completely immune to decay, (2) it's not very useful in whatever industrial/chemical processes use it and (3) it's easy to store cheaply for long periods.

It is notable for its rarity, density, softness, and very good electrical conductivity.

Gold finds a small number of industrial uses arising from its physical qualities. It is used in dentistry and in the manufacture of some electronic devices that require high-quality non-corrosive contacts.

However, its really practical uses are numerically insignificant. Of all the gold dug out of the earth, we have used the greater part of it in these three ways:-

as a personal adornment, with its color and relationship to wealth contributing to its use in the jewelry industry (~60% of the global supply)

As a public store of wealth - supporting monetary systems (about 20% of global supply)

As a private store of wealth (about 15% of the global supply)

Gold abundance

الExtremely rare gold. According to all geological experiments, it is found almost entirely in low concentrations in rocks.

Nuggets are an exception, but they represent the smallest fraction of gold ever discovered. Interestingly, there is also gold in solution in seawater, but although the total amount is large (because the oceans are huge), the concentration is low and makes extraction beyond any reasonable technology. The cost of pumping 1,000 tons of seawater into processing would greatly exceed the meager amount of gold it would produce.

The average concentration of gold in the Earth's crust is 0.005 ppm. The extraction technology is expensive primarily because the process always requires processing large physical quantities of ore to yield small results. The energy required to lengthen, grind and process the ore is a value in itself and places a lower limit on the quality of ore that can be operated profitably. Rising energy costs always affect the viability of mining.

At different points, the concentration of minerals within the Earth's crust differs from the average, and it is these differences that produce viable ores. Iron, for example, accounts for an average of 5.8% of the content of the Earth's crust. It must be concentrated by natural variations to about 30% to be considered ore, which indicates the required geological concentration of about 5 times. Low-grade gold ore contains 5 grams per ton (5 parts per million). So gold ore must be concentrated about 1,000 times higher than average to become viable.

The gold concentration process takes place above and below the earth's surface. At or near the surface there is alluvial gold that is concentrated by the effects of running water, for example in rivers. Because of its extreme density, gold will easily fall out of suspension as the water slows down. Therefore, as the river cuts through gold-bearing rock, then slows down as it hits a flatter/wider river bed, the gold will concentrate into 'placer' deposits, allowing the gold particles to be extracted by modern industrial refining and equivalents. The California Gold Rush of 1849 originated from gold deposits on the Sacramento River that were particularly available for this technique.

Underground gold veins or "loids" are produced in association with various mineral deposits, often including sulfides and pyrites. Gold concentration may occur when other minerals leach out over a long period. Sufficient yield ore is very rare.

Extraction and purification of gold

Because of the inertness of gold, about 80% of the gold within the ore is in its elemental state. There are several processes to extract and purify it.

Amalgamation is a mercury-based process that works because the gold is ready to be melted by the mercury. Mercury is placed on the ore, picks up the gold, and the resulting amalgam is distilled, with the mercury boiled to remove it. Mercury is highly toxic and therefore environmentally sensitive, which makes the industrial facility to do this type of extraction expensive.

The most important process for extracting gold is bluing. A solution of sodium cyanide in the presence of air causes gold to enter the solution. High-quality ores give up their gold under the influence of bluishness in what is called basin leaching. Lower quality ores require heap filtration, which involves huge piles of ore being repeatedly sprayed with a cyanide solution over a long period.

Raw gold is relatively purified in two main ways. The least expensive first stage of refining is the Miller process which uses chlorine gas and reaches a purification of 99.5%, then there is the more expensive Wohlwill process which electrolyzes gold to 99.99% purity.

400 oz LBMA Approved Gold Bullion Good Delivery on a White Background

Note that the Good London Delivery Bars - the main trading unit for bullion (shown) - are specified to have a purity of at least 99.5%.

Intangible advantages of gold

One of the important properties of gold is psychosis. Most people easily associate the distinctive color of gold with wealth, and many even consider the color beautiful - perhaps because it is closely associated with money. This gives it an immeasurable advantage over other tangible and portable stores of wealth.

The gold jewelry trade is a perpetual and global marketing initiative for bullion and for thousands of years has gone hand in hand with unalloyed metals in promoting gold as a store of material value. It creates a significant barrier to entry for any competing substance and contributes to securing gold, in the form of bullion, as a form of money.

Gold and modern money

Over the course of civilization, gold has been used as money, but the two are less closely linked now than they were over the past 3,000 years.

The supply of modern currencies (like many forms of ancient money) can be expanded by dictation, usually by a government or central bank. All modern money is governed in this way, which means that the value of savings is determined, to some extent, according to a political agenda. Contemporary savers are exposed to any economic or political crisis that may lead to excessive issuance of money, so their long-term prosperity depends on the reliability of political mechanisms to enforce monetary scarcity.

Historical precedent suggests that it is not always in the interest of politicians to keep money scarce.

Because of its rarity, gold reliably imposes scarcity, which is sometimes what makes it useful as money. Whether or not the physical appearance of money—in the form of bullion—is desirable is open to debate at any given time. But if a monetary material of reliable rarity is desired, gold remains as relevant as ever. The investment question with gold is not whether or not it reliably posits scarcity, which it does, but whether or not this reliable scarcity will be required in the future by savers.

Since the vast majority of people currently believe that our governments and central banks are skilled enough to manage the money supply, the use of gold as a monetary item has waned, especially over the past 70 years. This is a regular pattern. Gold will quietly slip into the background as fiat money proliferates because, as Gresham's famous law states, "bad money drives good money out of circulation." But part of the puzzle of money has to do with the periodic reappearance of gold, which the following pages aim to explain.