Introduction to Rhodium Bullion
- Written by Administrator
Introduction to Rhodium Bullion
By Doug West
Rhodium is a very rare metal. By rare, I mean it four times rarer than gold. In this article I want to go over some of the basics of rhodium bullion, including, uses of the metal, price history, and how this metal is traded.
In the world of precious metals rhodium is part of the Platinum Group of Metals (PGM). Like gold and silver rhodium is measured in Troy ounces (31.1 grams). Rhodium is a hard white silvery looking metal and is similar to platinum and palladium chemically. It is very resistant to corrosion and is a good conductor of electricity. Rhodium has a chemical symbol of Rh and has an atomic number of 45. Rhodium was discovered by British scientist William H. Wollaston in 1803. Mr. Wollaston also discovered palladium.
Rhodium is used as a finish for jewelry, mirrors, and search lights. For example, white gold jewelry is typically plated with rhodium. It is also used in electric connections and is alloyed with platinum for aircraft turbine engine components. Rhodium usage is dominated by automotive catalyst applications where it is used together with platinum and palladium to control exhaust emissions in catalytic converters. Around 80 percent of the rhodium mined goes into catalytic converters.
South Africa is the primary producer of rhodium in the world with 80 percent of the world’s output. Russia and Canada are the next two largest producers of rhodium behind South Africa. Global demand for rhodium is estimated to exceed output for the next several years.
Like all precious metals, the price of rhodium is very volatile. As you can see in figure 1, the price of rhodium has gone from below $500 per Troy ounce to around $10,000 per Troy ounce in just 14 years. If you are a rhodium investor, or are thinking about putting money into rhodium bullion, be aware that the price can change dramatically in a very short period of time.
Figure 1 – Price History of Rhodium 2000 to February 2014.
Until just the last few years rhodium billion was not that readily available to the average investor. The Baird Mint in Great Britain seems to be the only source of rhodium for investment. They produce 1/10, ¼, ½, and one ounce bars that are 999 fine. See figure 2 for an example of a Baird Mint rhodium bar. The spot price of rhodium (March 2014) is at $1085.00 per Troy ounce. The 1/10 ounce bars sell for around $210.00 to $230.00. This is a much larger premium over the melt value when compared to gold or platinum 1/10 ounce bullion. The premium on the one ounce bar is around $200.00 to $250.00. Compared to gold and platinum this is a higher premium over the melt value. Higher premiums are expected in small thinly traded markets.
Figure 2 – Tenth Ounce Rhodium Bar from Baird Mint
Owning rhodium bullion may not be for everyone, but, if you like precious metals this is one you may want to own.
Disclaimer: this article is intended solely for information purposes. The opinions are those of the author only. Please conduct additional research and consult your financial advisor before making any investment or trading decisions. No responsibility can be accepted for losses that my result of trading on the basis of this analysis.