Key Takeaways

• Gold coins are not formed naturally; they go through a multi-step process that includes mining, refining, assaying, and precision striking at sovereign mints.
• Before gold can become a coin, it must be refined to a specific purity and certified for weight and composition to meet mint and legal-tender standards.
• Bullion coins are produced primarily for investment purposes and are distributed through authorized dealers rather than sold directly to the public by mints.

Gold and coins are somewhat synonymous. The earliest coins were often made of gold or gold-based alloys, and to this day, many sovereign mints produce gold bullion coins.

However, gold does not begin pre-formed as coinage. It takes a tremendous amount of effort and machinery to push gold coins into the market.

Although it seems like a relatively simple thing, it’s important to understand all the steps that gold must undertake to transform from raw ore into legal tender coins. So, this page is the journey that every piece of gold you’ve ever seen has taken en route to your pocket.

Mining and Extraction

First things first, someone has to get the gold out of the ground. Gold is an element that occurs naturally on Earth, and there are several ways to recover it from bedrock.

The primary way is through large-scale mining operations. When gold is discovered relatively near the surface, companies extract gold through open-pit mining. When the ore is deeper in the earth, then the companies must excavate a vertical mine shaft and dig deep underground.

In essence, this type of mining is the same process as it has been for thousands of years. The only difference is the scope of operations, as modern machinery allows for greater ore extraction and processing.

Now, gold does not usually come out of the ground unattached to other types of rocks or minerals. So, mining companies and/or extraction companies must then separate the gold ore from the surrounding components.

There are many ways to accomplish this task. The simplest way is to use gravity to separate heavier gold from lighter materials.

However, if the gold is entwined with other rocks, companies typically use a chemical process. One of the most common methods is to spray the material with cyanide, which dissolves the gold and allows it to be collected.

Refining

Once the gold is extracted, it is ready to proceed to the refining stage. While extracting gold yields a purer product, the gold still contains significant impurities.

So, the first step is to melt the raw gold down. The raw gold is combined with a fluxing agent to separate the base metals still mixed into the ore.

Then, the results are subjected to a chemical or electrical stimulus to further purify the gold. The two primary methods used are:

The Miller process: Chlorine is introduced into molten gold, which converts other impurities into chloride slag. The slag is removed, and the remaining gold is usually quite pure.

The Wohlwill process: Impure gold is placed in a gold-chloride electrolyte, and an electric current is passed through the mixture. The pure gold separates and collects on the cathode of the circuit due to the attraction of the positive gold particles and the negative electric post.

The Wohlwill process is slightly more effective than the Miller process at producing a pure sample. The Miller yields 99.5% pure gold, while the Wohlwill yields 99.99% pure gold — meaning that the process used depends on the eventual application of the gold itself.

Once the gold is refined, it is typically cast into bars for transport. The gold is melted once again and poured into rectangular molds. Then, the gold’s weight and purity are stamped into the bar (or the molds contain the stamps).

Assaying and Certification

After casting, the gold bars are sent to the assayer in order to certify their weight and purity. The assayer will usually take a small portion of the bar and analyze it using methods such as fire assay or X-ray fluorescence (XRF).

Some assayers just shave a bit off the surface, but the more accurate method is to drill a small sample from the middle of the bar. There are now X-ray fluorescence scanners that can give a reasonable assessment of these factors, but sampling methods remain the most precise.

After determining the purity and weight, the assayer will issue a certification and mark the bar accordingly. Assays often come on separate cards, but occasionally get stamped into the bar, too.

Fabrication into Coin Blanks (Planchets)

Sovereign mints order the assayed bars from their chosen refineries. From there, each mint begins the process of turning the gold into coins.

The first step is to melt the gold and, in some cases, add additional metals to achieve a desired composition. For instance, American Gold Eagles are made with 91.67% gold, 5.33% copper, and 3% silver, so the US Mint must add the correct proportions of these metals to molten pure gold before casting.

The gold is then rolled into sheets, rather than bars. A machine press punches out circular blanks of gold that are the correct circumference for the desired coinage. These round discs are called planchets.

After the punch-out, the blanks are cleaned and prepared for the mint press.

Striking at a Mint

Each blank passes under a high-pressure coining press fitted with a die. The die is the negative of the coin’s design and presses the coin’s surface into the correct shape.

If the coin is meant to be double-sided (as most are), the press will compress the planchets on both sides simultaneously using different dies. Once the disc leaves the mint’s press, it is officially a coin.

Bullion Coins vs. Circulating Coins

To be clear, there are two types of coins that mints make. Circulating coins are intended for everyday commerce within their jurisdictions, while bullion coins are purpose-made investment products.

So, a circulating coin would be something like a nickel, a dime, or a quarter. A bullion coin would be an American Gold Eagle, an American Gold Buffalo, or a Canadian Gold Maple Leaf.

The biggest difference between the two is the gold purity each type of coin contains. Circulating coins are rarely made with gold these days, but high gold content is a primary feature of bullion coins.

Interestingly, both circulating and bullion coins are legal tender within their jurisdictions. In theory, you could exchange a Gold Eagle for $50 worth of products, but please don’t do this. The gold content is worth many times its face value.

Quality Control

After pressing, the new coins pass to the mint’s quality control department. In many ways, the QC department’s job is much the same as that of the assayer.

However, the quality control officers must also inspect the finish on the new coins and look for defective pieces. These rejected specimens can then be recycled and repurposed after undergoing another melt-and-mint process.

Distribution to the Market

Finally, the coins are shipped out into the public. Circulating coins are often sent to branches of the country’s central bank.

In the United States, the central bank is the Federal Reserve. Thus, quarters, dimes, and nickels are shipped to the Federal Reserve’s 12 regional banks. Some of those branches have sub-branch locations as well, so the coins may be distributed further. Finally, the Federal Reserve Banks distribute the new currency to private banks and credit unions.

Bullion coins, on the other hand, go to licensed bullion dealers (like JM Bullion). They arrive to the dealers already sealed in their plastic sleeves or, in some cases, hard plastic monster boxes.

From there, the dealers can disseminate them to the public. Bullion coins are entirely designed for investors and collectors to purchase through approved third parties. It is not possible to purchase them directly from the mint—at least not in the United States.

Conclusion

A gold coin’s journey begins in the crust of the earth and ends in sealed plastic, safe from the elements. However, the journey is not a simple one and requires precise steps to move from a raw chunk of ore to a pure coin.

Hopefully, this page has helped you understand all the different hands that must touch gold to make it coinage. In the end, understanding the process is the best way to trust in it, as many of the steps’ only priority is to affirm and reassure that trust. As it happens, the very survival of a nation can depend upon it.