The most well-known precious metals are gold and silver, but a precious metal is any rare metallic chemical element of high economic value. Throughout history precious metals have been traded as currency, but now they are generally regarded as a form as investment and many are also traded and used as industrial commodities.
In the past aluminium was regarded as a precious metal because pure aluminium was exceedingly difficult to refine prior to the invention of a new process in 1886. According to J. W. Richards, the adoption of the new process caused the price to collapse, and aluminium went from being a precious metal to a common metal.
Commonly Traded Precious Metals
The precious metals of gold, silver, platinum and palladium all have investment codes that allow them to be traded in international finance. Platinum in particular is widely traded and quite volatile in price. The use of precious metals as investments and a store of value drives their demand as much as their use as industrial metals does, and precious metals command much higher prices than common industrial metals.
The precious metals of gold, silver, platinum and palladium are all cast into ingots, and the bulk form of precious metals is referred to as bullion when traded on commodity markets. It is valued by its mass and purity rather than by a face value of money. Bullion metals are also minted into coins.
Investing in Precious Metal Coins
The most well-known precious metal coin is the South African Krugerrand which is made of gold. With bullion coins the face value of the coin for legal tender can be well below their value as bullion, determined by their weight and purity. An example is the Canadian Gold Maple Leaf Coin which has a legal tender face value of $50, but contains one troy ounce of gold, making it worth several hundred dollars as bullion.
The $10,000 Australian Gold Nugget coin is one of the largest bullion coins in the world, being made from one kilogram of 99.9% pure gold. Some larger bullion coins have been produced but not in mass quantities, as they are impractical to handle. Coins should be kept in mint condition to maximise their worth.
People often turn to gold and silver in terms of economic downturns and they are also seen as a hedge against inflation. Gold is the most popular of all the precious metals as an investment. Silver coins are popular with collectors because they are more affordable than gold and platinum coins. In addition their value as collectables can be worth more than their actual bullion value.
Other Precious Metals Besides Gold, Silver, Platinum and Palladium
There are other precious metals that belong to the platinum group, and these are not traded on the world exchanges. They include rhodium, palladium, iridium, ruthenium and osmium. Rhodium is one of the most expensive precious metals. The price is currently depressed due to the economic slowdown, but it commonly trades for around eight times as much as gold, per troy ounce.
 |
 |
 |
 |
 |
