Rhodium is one of those evasive precious metals that can perplex investors and asset managers. Rhodium is rare, pricey, and extremely volatile. Between August 2016 and August 2018, the price of this metal skyrocketed 272%… but this is nothing compared to what happened earlier!
In the wake of the global economic crisis in 2008, rhodium hit an all-time high at $10,025 per ounce as money shifted into the traditional bear market safe haven, only to plummet 90% before the year was over.
Jewelers will often apply a rhodium layer to sterling silver and white gold to enhance the appearance and prevent tarnish, but 80% of world production is dedicated to automotive catalytic converters.
Like all investments, putting all your money into rhodium bullion might not be the wise thing to do; but if you are lookin to diversify your precious metals portfolio, adding rhodium is the easiest thing to do.
Spring Hill Gold & Coin Shop Plus, specializes in gold, silver, platinum, palladium, and the above mentioned rhodium. We buy and sell rhodium bullion, platinum bullion, palladium bullion, silver bullion, and gold bullion too!
Before you jump on the rhodium bandwagon and get a few rhodium bars or coins, you need to have a better understanding of the metal itself.
Firstly, rhodium is extremely rare and extracted in only a handful of mines in the world. South Africa produces 80% of the rhodium production, but rhodium is also mined in the US, Canada, and Russia. Estimates show that rhodium comprises only 0.0002 parts per million in the Earth’s crust, which makes it one of the rarest metals in the world and this is reflected in its premium price.
Scarcity, high demand, and limited supply, are among the top reasons for the price spikes of rhodium. Most of the industrial demand comes from the technology and automotive industry. The automotive industry uses rhodium as catalysts in gasoline-powered cars and the metal has also found application in consumer electronics glass.
The increasing use of rhodium in the technology and automotive markets is not the only reason for its price volatility.
As previously mentioned, the supply of this metal is very short and condensed. Since more than three quarters of the metal comes from Africa, the current economic and political situation can and will cause the price moves. Market speculations also need to considered as well.
At one point, the spike in rhodium prices was caused by both automotive industry demands and Wall Street trading. It is believed that Wall Street speculators and precious metal investors got neck deep into rhodium and caused the prices to skyrocket before they came back to a more reasonable value.
The start of the 90’s also saw a huge increase in the price of rhodium, but this spike had nothing to do with trading or demand. On the contrary, it was caused by consecutive strikes of miners.
Should Rhodium Bullion Be In Your Portfolio?
The simple answer is yes, you should for sure, despite the metal’s volatility. But a better question to ask is: Why should you invest in rhodium bullion?
Rhodium bullion is a great anchor investment. When you purchase rhodium, you are focusing on the long-term protection of all your precious metal assets. From a historical perspective, gold, platinum, and silver bullions have been the best precious metal investments but they should be only part of your portfolio.
A well-rounded bullion portfolio means that you have some assets in each of the precious metals. Gold is the stable investment standard, silver is interesting because it has the tendency to spike in price, and platinum offers top returns because of its rarity. Rhodium, though, is in a category of its own.
With rhodium being even rarer than platinum and much more valuable than gold. The potential gains far exceed those of other precious metals. Novice investors are likely to be apprehensive about the volatile nature of this metal. But they shouldn’t.
New rhodium deposits and mines won’t pop up easily. As technology advances, there will be more industrial applications of metal. Also, governments and banks are shielding the metal from any weakness in PGMs (platinum-group metals, which rhodium is a part of) so the prices should remain stable in the speculated future.
Overall, is would be wise to invest in rhodium bullion. But, you should always keep diversification in mind! This is true not only of rhodium or other precious metal investment but all investments in general.
How to Buy Rhodium Bullion
Rhodium bullion is available in both bars and coins. It should go without saying that you need to obtain the bars or coins from a trusted supplier. Vermillion Enterprises in Spring Hill, Florida has been a reputable rhodium buyer and seller for over 15 years,
- NET WEIGHT
(PRECIOUS METAL CONTENT): 1 oz t
- GROSS WEIGHT: 31.2 g
- DIAMETER: 32.69 mm
- FINENESS: .999
- FACE VALUE: TVD 100
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