Are These Tall Tales True About Gold?

Recycle and Refine GoldSmelting and Refining

Jul 6

If you are a fan of the old TV sitcom Cheers, you remember what a classic role Cliff Clavin was. Cliff, who was played by the actor John Ratzenberger, was a know-it-all who either made stuff up or presented truths that nobody cared about. Usually, he preceded his revelations by saying, “Here’s a little-known fact.”

One example? Cliff once told his buddies at the bar Cheers, “2008 was the last time Ohio State lost the ninth game of its season.”

What does Cliff Clavin have to do with investing in gold scrap, platinum scrap and other precious metals? Actually, more than you might expect. (That was a little-known fact.) Why, because the world of precious metals is full of cock-and-bull stories. Some of them, even though they are sort of true, still won’t help you make money by investing in precious metals.

What are some of these tall tales? Let’s take a closer look.

“Gold is falling from the sky! All you have to do is collect it.”

This is actually true. Scientists who take ice samples from Antarctica, for example, report that miniscule quantities of gold really are falling to earth every year. Do they only fall onto Antarctica, and nowhere else on Earth? No, they fall everywhere, but samples are easier to collect from ice samples than they are in, say, the dirt in your back yard.

So while this is another “little-known fact” that is true, you can’t make money by collecting gold that has fallen to Earth. Why? Because the quantities are too small.

“Gold can be extracted from glass bottles.”

This Clavinism is even less true than the one about gold falling from the sky. But it persists anyway, and we don’t know just why. If there is any gold found in old bottles (and there probably isn’t any), the quantity is so small that there is no point in even thinking about making money by reclaiming it.

“There is still a fortune’s worth of gold that can be extracted from streams in California and Alaska.”

This isn’t actually a Clavinism, because it is true. It is also false to say that all the gold that was in these streams was mined out by prospectors during the Great Gold Rush of 1849. The fact is that panning (the process of using a hand-held pan to remove small quantities of gold from streams) only removes gold from the top surface of sand and silt on the bottom of streams. As more water flows through streams (and rain washes more gold and other debris into waterways), more gold appears on the surface of stream bottoms. That gold can still be separated by panning.

Plus, new alternatives to panning have been developed, especially gas and diesel-powered equipment that sucks up silt and sand from stream bottoms and separates gold from it. So the fact is that if you get the right equipment and can find the right stream, you might be able to obtain a profitable quantity of gold.

“Gold can be found in seawater.”

This, like most of the other “little known facts” we have covered already in this post, is true. But again, the quantities of gold in seawater are so small that it is impracticable to extract them.

But another fact, one that is a little more practical, is that gold can be found in the sand on the bottom of the world’s oceans. But wide-scale extraction of gold from that sand isn’t profitable using current technologies.

Why not? To quote from The National Ocean Service, “There is also (undissolved) gold in/on the seafloor. The ocean, however, is deep, meaning that gold deposits are a mile or two underwater. And once you reach the ocean floor, you’ll find that gold deposits are also encased in rock that must be mined through. Not easy. Currently, there is no cost-effective way to mine or extract gold from the ocean to make a profit.”