The real answer is the frequency of the return signal. When your VLF detector transmitter coil transmits at say 7.5kHz - or 7,500 sine (radio) waves per second, a magnetic field sets up around the metal object, and a particular frequency signal is transmitted back to the receiving coil depending on the density / alloy type of the metal it is seeing. The circuitry is programmed to make its best guess at what that metal is ferrous, or non-ferrous. Silver, brass, and copper for instance, are easier to separate from iron, lead and aluminum, while nickel and gold are not.
FAQ's about metal detectors -
Q: How does discrimination work? A better word for discriminator is perhaps "differentiator." At minimum or no discrimination, all metal within the detectable range is detected. As you slowly increase discrimination, small pieces of metallic trash and ground mineralization are ignored (rejected). As you increase the discrimination, pull tabs, small nails, foil, and even some good targets (such as gold rings and nickels) will be rejected. The best way to learn the discrimination points (the lowest discrimination setting at which an object is rejected) of your detector is to scatter some sample targets, such as coins, pull tabs, and foil on the ground from 1-2 feet apart. Starting at 0, or your detector's lowest discrimination point, scan each target. Gradually increase discrimination and record the results. With practice, you should be able to determine whether or not to dig by listening closely to the target signals.
White's Metal Detectors - Metal Detector FAQ's What is discrimination? Discrimination is the ability of a metal detector to tell the difference between different types or alloys of metals. This allows you to selectively dig up only those types of metals likely to be of interest to them. There are audio (speaker/headphone) types of discriminators and visual (meter, LCD) types. Most higher end models have both types. The idea is to increase the odds in favor of digging valuables, and decrease the odds of digging trash.
5. Can a detector be set only to respond to gold?
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No. There are too many variables with exact alloys and sizes to pin it down tightly enough to dig only one type of metal. For example, a large piece of gold may read high on a display or audio discrimination scale and a small piece of gold may read low on that same scale. Gold with some copper, silver, or platinum within its natural alloy will indicate differently. And other metals with similar electrical characteristics may read identically. Lead and aluminum are the most difficult common trash metals to eliminate. Even with the most sophisticated detectors available, expect to dig some trash. But a good discriminator increases the odds in your favor.