How Demand for Platinum Group Metals has Emerged in the 21st Century

There's more to precious metal investing than gold and silver. Platinum, palladium and the other Rare Earth Metals that are found it the same chemical group share common qualities, no the least of which is extreme rarity. As new inventions are created to utilize these rare and precious metals, investment in them has garnered more and more attention as a commodity item.

The platintum group includes the more common “transition metals” such as cobalt, iron and nickel, all of which are important in industry and commerce, though hardly rare. Much more rare are iridium, osmium, ruthenium and rhodium, in addition to the more commonly traded platinum and palladium. These metals all have high melting points and most are reactive with hydrogen, making them useful as catalysts in many types of reactions.

Indeed, they are very often found together in the very same deposits, the others usually considered a by-product of platinum mining, even if the other metals are actually worth more as precious metals. Gold and silver are chemically and physically distinct from the platinum group metals, though are sometimes found near or even in platinum group metal deposits.

Rhodium is perhaps the most widely used and traded of the “other” platinum group precious metals. Investing in this commodity has been a tumultuous ride for well-heeled investors over the last two decades. Its use in very specific technologies and industries, such as mammogram machines, neutron detectors and the industrial production of acetic acid.

With prices reaching as high as $10,000 per ounce in early 2008, the collapse of financial markets in late 2008 took the price of rhodium with it. Less than two months later, the price had fallen to less than a tenth of its previous historic high. Though once considered a safe investment, the drop off in physical demand for the product is very keenly felt in the spot price.

Like rhodium, iridium is also a very hard and brittle metal, preventing it from being used as jewelery in all but the most limited manner. Iridium is particularly notable for its ability to resist tarnish, even at high temperatures, making it very useful in high temperature industrial applications, especially where conductivity is important. It is also very dense and hard, making it a component in plating many industrial valves and devices. Other uses include high-end optics, the production of anti-mater and many other medical and scientific applications when alloyed with platinum.

Very rare in the Earth's crust, it is thought that due to its unique property of seeking out and binding to iron, most of the iridium on Earth is actually found in the inner core of the planet. Interestingly, it is found in relatively large measure within nickel-iron alloy meteorites, and it is believed that for this reason much of the available iridium is actually extraterrestrial in origin.

Ruthenium and Osmium are both extremely hard and tarnish resistant, often being used as an alloy in very tiny amounts to add durability to other metals such as titanium. Both of these metals are highly useful in very specific use, but care must be maintained when handling them, as they easily create highly toxic tetroxides when exposed to air in their elemental form.

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Danny Burns

April 12, 2009