All About Gold

Throughout history, mankind has treasured gold for its natural radiance and beauty. As far back as our recorded history goes, we have been fascinated by this king of all metals. Many ancient civilizations — including the Egyptians and the Greeks — prized the magnificence of gold, connecting its richness to their gods and demigods. Interestingly, despite their love for the metal, the Egyptians never used it for anything resembling a monetary system. In fact, despite the love of gold found in these two well-known civilizations, neither of them was the first to use a gold-based monetary system. No, that distinction belongs to the Kingdom of Lydia, a lesser known ancient civilization that was centered on what is now western Turkey from 1200–546 BC.1 But whether or not a civilization has used gold for monetary purposes, the fact remains that virtually all of them have considered this malleable, yellow metal to be an indication of status and power. Even in today’s modern world, gold is still highly sought after and prizes for its ability to confer status and its now inherent value. Here in the United States, the value of our money is no longer tied to gold, not since the gold standard was abandoned by President Nixon in 1971.1 However, it is still a highly valued commodity that can be used for a variety of purposes including investment. Gold coins like the 2018 American Gold Eagle are still minted by the American government, and can often present a great investment opportunity.

Where is Gold Found in the United States?

Americans have been fascinated with collecting gold for almost as long as there has been the United States. In 1799, just 23 years after the United States was founded, there was a major gold rush in North Carolina that started when a massive gold nugget weighing approximately 17 pounds was discovered by a young boy.1 At today’s gold prices — and depending on its purity — that single nugget could be worth in excess of $330,000. The most famous gold rush in American history, however, is the 1848/1849 gold rush that occurred in and around San Francisco, California. That particular gold rush is quite possibly responsible for San Francisco being the bustling city it is today. Before 1848, the town of San Francisco only had about 1,000 residents. Over the next few years, the town’s population exploded, growing to over 25,000 people.1 It’s probably the only gold rush in history to be immortalized in such diverse ways as song lyrics — ”…lived a miner ‘49er and his daughter Clementine” — and the name of a professional sports team — the San Francisco 49ers. While personal gold prospecting isn’t common nowadays, almost all of the fifty states still have some deposits of naturally occurring gold. However, there are some states that have had more historically high levels of gold than others. Major amounts of gold have been found in these states (listed alphabetically)2: ●Alabamarn●Alaskarn●Arizonarn●Californiarn●Coloradorn●Georgiarn●Idahorn●Michiganrn●Montanarn●Nevadarn●New Mexicorn●North Carolinarn●Oregonrn●South Carolinarn●South Dakotarn●Tennesseern●Texasrn●Utahrn●Virginiarn●Washingtonrn●Wisconsinrn●Wyoming

How is Gold Measured?

The measurement of gold can refer to either its weight, purity or both. Therefore, trying to provide a simple answer to a question like “how is gold measured?” can be tricky, but we’ll do our best.

Gold Weight Measurements

The weight of gold and other precious metals is traditionally measured in Troy Ounces. You’re probably familiar with the use of ounces as a weight measurement, but did you know that there is more than one kind of ounce? It’s true. In traditional Imperial measurements, an ounce — also called an avoirdupois ounce — is equal to about 28.3495 grams.3 A troy ounce, on the other hand, is equal to about 31.1035 grams.3 As you can see, a troy ounce is about 10% heavier than an avoirdupois ounce, so you should be wary of any companies that list gold weights by ounce with no modifier to specify which type of ounce is being used.

Gold Purity Measurements

The second type of measurement that needs to be considered when talking about gold is the purity of the metal. You may find that gold purity is given in a variety of different ways including “% Gold,” “Parts Fine,” and “Karats.” Karats are probably the most common way to note gold’s purity in the United States, but the term can be easily confused with Carats, a term used to denote the weight of precious stones. Though the two words share a derivation and origin, they are used distinctly for their separate purposes.4 When talking about the purity of gold, pure gold is rated at 24 karats. As such, to determine what percentage of a particular gold piece is, in fact, gold, you simply need to divide its karat content by 24 or consult the following list of common karat ratings. ●24 Karat Gold / 24 = 99.99% Pure Goldrn●22 Karat Gold / 24 = 91.67% Pure Goldrn●18 Karat Gold / 24 = 75% Pure Goldrn●14 Karat Gold / 24 = 58.33% Pure Goldrn●10 Karat Gold / 24 = 41.67% Pure Gold Gold bullion purity is traditionally expressed as a decimal denoting the parts of gold per thousand parts of metal contained therein. Therefore the ratings for gold bars can range from .0 (no gold) to .9999 (pure gold).

Why is Gold (and Silver) a Good Investment?

Due to its intrinsic value, gold typically makes a good addition to any investment portfolio. This is thanks in part to the fact that in the last twenty years, the price of gold has risen dramatically. On February 24th, 1998, a troy ounce of gold was valued at $291.40.5 As of February 21, 2018, that same troy ounce is worth $1,324.01, an increase of more than 4.5X. Interestingly, the price of gold tends to go up when the cost of living increases, which can make it a great investment to hedge against future inflation. In fact, it’s not uncommon for the stock market to go down and the price of gold goes up during a high inflation year.6 Generally speaking, the same contributing factors that make gold a good investment also apply to silver, but at a lower price point.

What Gold Coins Should I Invest In?

There are a number of ways that you can invest in gold and other precious metals, including Gold IRAs and direct purchase and storage of gold bullion. Of course, buying and storing your own gold bullion is a process that is fraught with security and storage issues. If you really want to invest in gold, you should consider investing in coins — like the 2018 American Gold Eagle and Silver American Eagles — that are approved by the IRS for inclusion in Gold IRAs.