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3 Interesting Facts About Investing in Rhodium

3 Interesting Facts About Investing in Rhodium

When we think of precious metals many of us will purely think of Gold and Silver. Yet Bleyer stock other precious metals as well, including Platinum and Palladium. Back in late 2017, we wrote two articles specifically about investing in Platinum and Palladium. But today, we’re going to focus on the rarest of them all. And to do that, there is no better place to start than quoting from the UK’s best selling financial magazine, Money Week:

“While Gold and Silver have attracted the attention of some investors of late, there is a metal that is far, far rarer and has fundamentals that merit investment consideration. Some consider it the ultimate symbol of wealth - above and beyond Gold, Silver or Platinum - because of its price and very significant rarity.

The metal in question is Rhodium. Discovered along with palladium by British chemist and physicist William Wollaston in 1803, Rhodium belongs to the platinum group metals (PGM) together with platinum and palladium.”

 

Rhodium Ore

 

So, what is Rhodium?

Unbeknown to all, the term Bullion only applies to Gold and Silver. Whereas, Platinum, Palladium and Rhodium are actually referred to as 'Platinum Group Metals' or PGMs. The PGM group even includes other much lesser known sister metals, such as Ruthenium and Iridium as well.

However, it is the top four - Gold, SilverPlatinum and Palladium - that are used the most frequently as a store of investment by private investors, governments and central banks.

 

Yet, it is Rhodium that is the rarest of the PGMs. Here are some very interesting facts about this precious metal:

  1. Naturally occurring rhodium is never found as a chemical compound but as a metal alloy with similar metals.
  2. It is the world’s most expensive traded precious metal costing double that of Gold.
  3. Rhodium is hard and durable with a slight reflective quality. It is used to coat both white gold and silver jewellery to give them a brilliant shine.
  4. Yet it is also known as a noble metal because it is both corrosion and oxidation resistant.
  5. Rhodium is a fission product of nuclear waste but the expense of separation from these wastes is too high to warrant extraction.
  6. Rhodium is frequently used as an alloy for Palladium and Platinum in aircraft spark plugs, as well as in electrodes, furnace coils and catalytic converters in cars.
  7. Over 80% of the world’s Rhodium is mined in South Africa, where it is obtained entirely as a by-product of platinum and nickel mining. Other producers include Russian and China (courtesy of the Mining and Metals section of the Careers and Industry Guide on Mining, Oil and Gas).

 

Rhodium Mining in South Africa

 

Geo-Political Influences on the Price of Rhodium

Clearly, the most obvious factor is that 14% of the world’s supply comes from Russia. For example, in 2001 Russia stops its Palladium shipments causing the price to escalate. As recently as 2009, Russia used its gas supply as trading leverage. So, it doesn’t take much imagination to envisage a tightening on the supply of Rhodium.

Secondly, South Africa has its own political issues, from miner’s strikes, to government cuts in electricity supply, which interfere regularly with mining output. Although these issues could lead us to believe that Rhodium is a good investment opportunity, due to factors able to influence the price upwards, investing in Rhodium must come with strong warnings.

Seeking Alpha sum these up well. Of course, each reader and investor is the master of their own ship. But I wouldn’t be doing my job if I didn’t highlight these well-known caveats:

 

1) Rhodium, as discussed, is mostly a by-product: You won’t find many companies that specialize in “rhodium mining” because nobody really goes looking for the stuff. It sort of comes along for the ride. 

2) Rhodium is more glass-like than gold-like: Yes, technically rhodium is a metal, but it’s not like Gold, Platinum and Palladium at all. It’s remarkably brittle making it difficult to turn into a coin or ingot. If you put a gold coin in a vice, you could bend it. A rhodium coin will just snap into two. That doesn’t mean it’s fragile. It just means it’s more glass-like than gold-like, which makes it cumbersome to trade.

3) There are limited ways to invest: According to Seeking Alpha, “the few ingots or coins available are most curiosities, while Kitco will only, for example, offer you back 80% of Rhodium’s value if you so much as open or tamper with the seal under which your Rhodium arrives. There’

 

Rhodium is extremely rare for investment but not many refiners produce using this metal. Bleyer is unique in that we can offer our customers the only commercially produced range of 999.5 purity Rhodium investment bars.

The 1oz Rhodium bar is currently priced at around the £1,600 mark (subject to VAT), making this an extremely compact way to store one’s wealth with easy home safe storage. Bleyer are also pleased to offer this size bar as a pre-owned option.

For a more substantial, yet equally compact, investment, Bleyer offer the 5oz Rhodium bar. This investment is currently being offered at around the £7,800 mark. Buyers should be aware that because the market for Rhodium is extremely thin, the premiums are high and this metal is also subject to VAT.

Both investments are offered by Bleyer with free insured delivery.

So, call now to explore your current investment opportunities in the rarest precious metal of them all, Rhodium. As always, we recommend our clients conduct their own thorough and additional research. Contact one of the team via 01769 618618 or [email protected]

And as promised, for our previous introductory articles on the other PGMs offered by Bleyer please click here for Platinum and here for Palladium.

 

1oz Baird's Rhodium Investment Bullion Bar lying on wood, now available from Bleyer

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