How To Identify Gold

With gold prices climbing back toward all-time highs, you might be tempted to add some to your portfolio. Many investors already have. Sales of gold-backed exchange-traded funds have set records this year, with net inflows of $23 billion in the first quarter. And gold has delivered solidly positive returns during this bear market in stocks. But pouring a chunk of your assets into gold isn't always a good idea. In fact, gold has a spotty long-term record as an investment. Quartz rocks sometimes have threads of gold running through them, but this type of gold may require a professional's opinion to determine if it is gold. To make specimens for museums from veins of gold in quartz, professionals melt the quartz in an acid bath, leaving just enough of the quartz as a base for the threadlike filigree-appearing gold.

One of the ways to find raw gold begins with panning for it in creeks or rivers fed by eroded gold from mine or natural deposits in rock formations above the water sources. Placer gold, roughly 75-to-95 percent real gold comes in a variety of shapes and sizes, from small flakes to large bumpy nuggets. When panning, raw gold weighs the heaviest and is found in the rifles or along the bottom edge of the pan. Raw gold appears brassy yellow and bright. If you think it is gold, place your hand between it and the sun to create shade over the gold. If it still appears bright in the pan, chances are that it is real gold. Fool's gold does not appear as bright when shaded. Whenever people are struck by gold fever and a gold rush begins, inexperienced prospectors come across iron pyrite and think it is real gold. To an overexcited miner, iron pyrite -- commonly known as fool’s gold -- does have characteristics similar to real gold. Their disappointment is all the more intense when they realize that they have been fooled. Whether you are prospecting for fun or profit, learn to recognize the telltale qualities of iron pyrite.

Fool's gold" is a common nickname for pyrite. Pyrite received that nickname because it is worth virtually nothing, but has an appearance that "fools" people into believing that it is gold. With a little practice, there are many easy tests that anyone can use to quickly tell the difference between pyrite and gold. The nickname "fool's gold" has long been used by gold buyers and prospectors, who were amused by excited people who thought they had found gold. These people did not know how to tell the difference between pyrite and gold, and their ignorance caused them to look foolish. In some cases, Chalcopyrite and small pieces of biotite mica can fool you. Chalcopyrite (a copper iron sulfide) has very similar properties to pyrite. It has a lower hardness than pyrite (3.5 to 4), and a lower specific gravity than pyrite (4.1 to 4.3), but the same tests can separate chalcopyrite from gold. Chalcopyrite also has a greenish-black streak. Many people are surprised that biotite mica can fool people into thinking that it is gold. This most often occurs when an inexperienced person is panning for gold and sees a bright flash in their gold pan. After chasing the tiny, highly lustrous flake, they think that it might be gold. However, slight pressure with a pin can break the flake of mica, but a tiny flake of gold will bend around the pin.