American Gold Coin Value Comes From Gold’s Unique Properties

Gold is one of the most precious metals in the world. It is present in the rivers, seas, and the earth’s crust and trace amounts are present in plants and animals. It is, however, difficult and expensive to extract.

The first gold coins were made around 700 BC and made of electrum, a naturally occurring alloy of gold and silver. Coins became a way to standardize the gold so it didn’t have to be assayed every time it was traded.

Gold coins gradually got more complex images stamped on them, as civilizations learned to work with the material. When rulers were depicted on coins in the Roman Empire, it showed the sovereignty of the empire. Rulers then became the general theme for representing on gold coins where lifetime rulers existed.

All the gold ever mined would make a cube 60 feet by 60 feet by 60 feet. It makes me wonder why Fort Knox is so big. It certainly didn’t store all the gold ever mined since the beginning of history. I suspect Ft. Knox must be storing other things besides gold.

The total world production of gold amounts to 5,407,112,558 ounces. The population of the world is 6,692,030,277, so there are 25 grams of gold per person on the planet. A troy ounce equals about 31 grams. All the gold ever produced in history wouldn’t allow everyone in the world to own an ounce of it today.

There are 3 ways for obtaining gold from the earth. They are: by mining, by sluicing and by panning. All are expensive in terms of the amount of energy it takes to obtain a single ounce of pure gold.

In modern mining operations approximately 3 tons of ore are needed to extract one ounce of gold. It is estimated that only 125,000 tons of gold have been mined the world over since the beginning of time.

Properties of pure gold:

  • It has a melting point of 1945 degrees Fahrenheit. When alloyed with other base metals the melting temperature of the resulting alloy is changed and often lowered by the melting point of the base metal.
  • Pure gold has a specific gravity of 19.33. It is relatively heavy compared to most metals. For example, silver has a specific gravity of 10.7 and iron 7.8. Platinum is heavier than gold with a specific gravity of 21.4.
  • It is more malleable than any other metal and can be hammered into foil so thin that it is almost transparent.
  • It has a unique ductility property that allows it to be drawn into wire so thread-like that it can barely be seen.
  • Gold’s Chemical symbol is Au, which is short for the Latin name Aurum, meaning “glowing dawn” because of its color. Gold and copper are the only pure metals that have a color other than the typical metallic silver-like color of other metals.
  • Gold is virtually indestructible. Gold is the most non-reactive of all metals. It’s called a “noble” metal, because it doesn’t oxidize under ordinary conditions. That means it will never tarnish like silver or rust like iron.
  • It is one of the softest metals known. On the Mohs scale of mineral hardness, which is a measure of a mineral’s resistance to scratching, gold has a hardness value of 2 to 2.5. Amazingly, it is about as soft as gypsum. Pure gold can be scratched with your fingernail. Diamonds on the other end of the scale have a value of 10.

About 50% of the gold mined is used for jewelry. About 40% is used for investing and collecting, as in American gold eagles or 19th and 20th century rare gold coins. Only 10% is used in industry. Its cost prohibits much industrial use. Where it is used, nothing else can replace it.

Some Industrial uses:

Gold’s physical properties of high electrical conductivity and chemical inertness make it an excellent and reliable conductor, particularly in harsh environments, where temperatures can range from -55°C to 200°C.

The use of gold in circuitry ensures reliability of equipment operation, particularly in the vital activation of safety airbag mechanisms in motor vehicles or deployment of satellites and spacecraft.

High purity gold reflects heat energy almost completely. That makes it ideal for heat and radiation reflection. Gold-coated visors protected astronauts’ eyes from searing sunlight on the Apollo 11 moon landing.

Gold not only will reflect heat, but it also is an excellent conductor of heat. It is used in many electronic processes to draw heat away from delicate instruments. The main engine nozzle of the space shuttle uses a 35% gold alloy, for example.

Learning more about the unique properties of gold has helped me appreciate my American gold coins and world gold coins much more. As easily as gold can be damaged, I’m surprised so many rare gold coins have survived as well as they have.