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Precious Metals

Precious metals

Why are precious metals of high economic value, because they are rare metallic elements?

The best known ones are of course Gold and Silver and Platinum. However there are others not so well known to the general public such as Rhodium, Palladium, Ruthenium, and Iridium.

Precious metals are in constant demand, whether it is by investors or manufacturing each placing a value on the material whether it be a store of value, or the perfect material for the job.

Bullion and Coinage

If any commodity or item is difficult to find or produce then it is usually viewed as being rare. If this is the case with a metal then it then becomes precious. Market value or high demand for a product or metal can also indicate its reputation of being precious.

Precious metals can and are traded in the metal market and in this form the collective name is bullion. The price is set daily and is based against supply and demand world wide. The major aspect of bullion is that it is primarily valued by the mass and purity of the material itself, rather than its value based against its financials worth.

Gold is a shining example of Bullion, if you will excuse that slight pun. It’s difficult to locate, expensive to recover from the ore, a tiny amount of gold is produced per ton of ore processed, and the quantity brought to the market is small against a market whose demand is high.

Bullion has been used for the production of coins ever since Gold and Silver has been smelted, however the Chinese between c. 600-300BC were the first to use metal in coinage although these were of a low intrinsic value.

The earliest coins made from bullion were produced in ancient Turkey and were predominantly made from Silver and copper. The Greeks in c.595BC began to strike coins from Silver in preference to Gold, and were also the first to use pictures of their rulers stamped into each coin.

Australia produced one of the largest coins ever made which was minted from a kilogram of 99.9% pure Gold. The value of the coin is 10,000 Australian dollars and is called the Gold Nugget.

Aluminium was once qualified as a precious metal as late as 1855. As a metal it’s probably one of the most common elements occurring on earth, and what made it so precious was the fact that it was so difficult to extract from the ores, consequently making it more expensive than Gold.

In 1886 a man named Hall-He'roult invented an electrolytic process for the refining of aluminium thus causing a massive collapse in the price which has never recovered.