A touchstone was a small, smooth, dark-colored stone, typically made of materials like jasper or slate, that was used to judge the purity of gold and silver by taking advantage of the fact that different purities of metal left distinct streaks on it.
The way it worked was the testing metal was scraped against the stone and the resulting streak was then compared with one made from a reference 'needle'.
This needle would be of the same metal, with known purity- so for gold it would be like 14, 16, 18, and even 24 karat.
If the testing streak was equally as bright as the reference one, then it would prove it was similarly pure.
This was a relatively easy and nondestructive testing process, needing very few tools and giving accurate enough answers for jewelers and traders.
Thus it was something many, especially those trading overseas heavily relied upon.
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