How did gold form in the sierra Nevada mountains?

The gold formed by fluid inclusion in a 130-mile-long belt in the foothills of the Sierra Nevada Mountains, and not in the Mountains themselves.

Gold was probably initially concentrated from ocean water by volcanic vents in metamorphic rocks at the leading edge of the Smartville Block, a chunk of eastward-moving crust called an "island terrane", as it collided with the North American Plate about 165mya. During the period of collision, partial melting of this rock and saturation with water caused the gold and silica to dissolve in the water and flash into steam which made its way up through cracks and fissures. When the pressure and heat reduced, the gold and silica dropped out as veins of gold-laden quartz filling cracks in the country rock of the Plate.

Many millions of years later, large chunks of dense rock broke off the bottom of the North American Plate and descended into the Mantle. This caused the Plate to be thinner and lighter, resulting in a large fracture and upwelling of Plate material, which is now the Sierra Nevada Mountains. Erosional processes in the last four million years washed some of the gold out of the quartz and into fossil river beds, which was the source of the 1849 Gold Rush gold. The gold-rich quartz veins were found when the placer golds were running out.