The recent re-emergence of precious metals in the public eye has been underscored by an unprecedented divergence in the spot prices of gold and platinum. Traditionally, platinum has sold at a premium above the price of gold. But in today’s topsy-turvy financial world, platinum now sells at a deep discount below gold. (This is in part because platinum is considered more of a industrial metal, whereas gold is both an industrial metal and a monetary metal.) As I’m drafting this, I see that gold is selling for around $1,200 per ounce, while platinum is just $915 per ounce. This disparity has led some to shout: “Forget gold, buy platinum!” This approach has merit, but I’d take it a step further, and say: “Forget gold and platinum, buy rhodium!” (Rhodium is more rare than platinum, yet is currently priced lower.)
As recently as seven years ago, rhodium was selling for $6,000 per Troy ounce. It is currently slumbering down around $670 per Troy ounce, and you can buy a serialized one Troy ounce Baird Mint Rhodium bar for around $850. (The minting premium for each bar is high because so few bars are produced, and because it is fairly difficult to mint, since it is brittle.) But $850 or even $900 is a bargain, in my estimation.
What on Earth is Rhodium?
LeftistAgendaPedia (my name for Wikipedia) tells us:
“Rhodium is a chemical element with symbol Rh and atomic number 45. It is a rare, silvery-white, hard, and chemically inert transition metal. It is a member of the platinum group. It has only one naturally occurring isotope, 103Rh. Naturally occurring rhodium is usually found as the free metal, alloyed with similar metals, and rarely as a chemical compound in minerals such as bowieite and rhodplumsite. It is one of the rarest and most valuable precious metals.
Rhodium is a noble metal, resistant to corrosion, found in platinum- or nickel ores together with the other members of the platinum group metals. It was discovered in 1803 by William Hyde Wollaston in one such ore, and named for the rose color of one of its chlorine compounds, produced after it reacted with the powerful acid mixture aqua regia.
The element’s major use (approximately 80% of world rhodium production) is as one of the catalysts in the three-way catalytic converters in automobiles. Because rhodium metal is inert against corrosion and most aggressive chemicals, and because of its rarity, rhodium is usually alloyed with platinum or palladium and applied in high-temperature and corrosion-resistive coatings. White gold is often plated with a thin rhodium layer to improve its appearance while sterling silver is often rhodium-plated for tarnish resistance.”
Okay, so this stuff is rare and valuable.
How Rare Is Rhodium?
But just how rare is it? In terms of its relative rarity (that is, as a percentage of the volume of the Earth’s crust, compared to the other precious metals , in descending order, ranging from more common to less common, we find:
- Ag (Silver)
- Ru (Ruthenium)
- Au (Gold)
- Pt (Platinum)
- Pd (Palladium)
- Rh (Rhodium) <–
- Os (Osmium)
- Ir (Iridium)
So… This element is more scarce than Platinum and even Palladium. That’s nifty cool.
The other key consideration is that presently more than 90% of the Rhodium mined worldwide comes from mines in just two countries: Russia and South Africa. If geopolitical events conspire to limit the mining operations or the sales availability of Rhodium from either or worse both of those two countries, then the price of Rhodium could explode overnight. All that it would take is the outbreak of civil war in South Africa, or the outbreak of WWIII–or perhaps even just a regional war in the Middle East that involves Russia–and then kaboom! There goes the price of Rhodium, through the roof. Perhaps up to $4,000 per ounce. That would provide a nice profit.
An aside: One of the not-so-well publicized uses for Rhodium is as a plating in some high tech military weapons systems. So it is considered a strategic metal. So that could be a factor, in the event of another World War.
Who Should Buy It?
Rhodium is not for novice investors. I would recommend investing in some rhodium only if you are looking for a long term hedge, and only after you already have your family survival and self-sufficiency preparations squared away, and after you have socked away some small silver coins for barter. (Namely: Pre-1965 silver dimes and quarters.) Rhodium is much too exotic to be practicable for barter in the midst of a monetary crisis. Instead, think of it as time machine, a tool to preserve some of your wealth from one side of a crisis to the other. Obviously, the time to sell is during an economic revival, when there is a big demand for cars–because gas engine cars need catalytic converters. Again, Rhodium is a long term hedge only for those who already have solid positions in other precious metals.
Where Should You Buy It?
I suggest asking your local coin shop to order you one or more 1-ounce Baird Mint Rhodium bars. Then pay cash for it, and walk away with no paper trail. Or, if you don’t mind the paper trail, then you can send a bank money order of cashier’s check to one of the larger and most trustworthy precious metals dealers, such Kitco.com . Be advised that the smaller bars (1/2, 1/4, and 1/10th ounce) carry the highest premiums.
For the sake of authenticity, I would recommend buying only the .999 fine 1-Troy ounce bars that are minted and packaged by Baird Mint of London. Serialized bars are best, for resale. For most investors, even though the per-ounce premium is lower I do not recommend buying Rhodium in “sponge” (powder) form, because the resale process is generally restricted to only selling it to the same company from which you bought it.
Where Should You Store It?
As with all other precious metals, never take some dealer’s promise to “vault store” them for you. The only truly safe precious metals investments are the ones that are in your personal possession. (See the many archived SurvivalBlog articles on construction of hidden wall or door caches .)
One last bit of advice: Be sure to shop around. The market for Rhodium bars is incredibly thin, so prices vary widely. – JWR
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