1 The Intricacies Involved in the Birth of Gold

Gold investments are preferred as hedges in times of economic uncertainties. Whenever the government keeps its printing presses working overtime to stimulate the economy, the U.S. dollar is found to get devalued and during such times the price of gold rises. In addition, the past eleven years have been witness to the fact that gold begins each year with a certain value, suffers a few corrections and then ends the year with a value higher than what it started with, in that year.

All of us have a fair idea of investing in gold and the various ways in which the same can be done. But would it not be interesting to know how gold comes into the market?

Well, there are four major steps that are involved in this process. They are as follows:

Gold Prospecting

As a metal, gold is present in minute quantities in soil and rocks and in comparative abundance in certain other areas where mining can generate good yields of the yellow metal. In the latter case, there may be pure gold deposits or deposits constituting a combination of gold and other metals like silver, etc. Prospectors search for these regions and this method is referred to as prospecting. When such areas are identified, these prospectors or scientists do the drilling work and acquire samples so that they can be probed for the quantity of gold present therein. If they believe that gold is available there in sufficient quantities and that further process will be worth the effort, there are probable chances of them setting up mining operations.

Gold Mining

1. If solid rock contains the gold that has been explored by the Prospecting stage and if this rock is present at the surface of the earth, the open-pit mining system is employed. This involves drilling a pattern of holes into which explosives are filled and detonated in order to break the ground up. These lode deposits are then laden onto haul trucks.
2. If the rock that is concentrated with gold is present under the earth’s surface, then a shaft, also referred to as an Adit is drilled into the ground so that the lode deposit can be easily accessed. Then long vertical tunnels are dug and the ore blocks are loaded with explosives which are later detonated; the ore that breaks due to the same falls at the foot of the stopes (tunnels) and loaded onto the trucks.
3. Sometimes gold is present in loose form along with sand and other ingredients on the beach and similar other places. This mixture is mixed with a lot of water and allowed to settle down. The density of gold being more than that of the other materials, it sinks faster to settle at the bottom. In many cases, the process of Panning is adopted wherein the miners use pans, either metallic or plastic-made so that gold can be separated.

Gold Extraction

After the mining step, there is breaking down of bigger rock pieces containing gold by crushers into pieces as small as road gravels. These are subject to rotation by drums filled with steel balls and then ground to fine powder or slurry. This is then formed into a pulp by mixing with water and run through leaching tanks using cyanide to dissolve the gold, which in turn attaches itself to carbon on the introduction of the grains of the latter to the tank. When the pulp is filtered through the screens, the carbon which bears the gold gets separated. Further process involves electro winning and gold is collected on the negative terminal after it is placed in a cell and a strong electric current is delivered to the solution.

Refining

The negative terminals of the furnace are melted at around 2,100º F in a process called smelting and flux is added to the molten mixture so that gold gets separated and is sent to refineries.

As the U.S. economy is not showing any immediate indications of a healthy recovery many financial experts opine that the time could come when we would have to again resort to the gold standard. After the recent quantitative easing round, it will not be long before the next one will be waiting in line following the apprehension of yet another recession befalling the nation; not forgetting the problem of the fiscal cliff, tax , spending cuts and other major factors doing their best to further cripple the economy of the nation.

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This article is written by Abby Joseph on behalf of Profit Confidential. You can find more interesting stuffs about gold and its investment here or by following it on Facebook.

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