Gold nuggets are formed deep beneath the earth's surface at high temperature, so the stuff people find in a prospectors pan got there by erosion and other natural processes. Today, gold nuggets are used in jewelry, perhaps as a pendant at the end of a gold chain or as an accent on a bracelet. Rock hounds collect gold for the same reasons they collect other minerals, although it's an expensive hobby, which is why most gold nuggets are socked away for their financial value.