Characteristics and Uses of Precious Metal Dust, Flakes

Anyone who has been involved with precious metal investing for some time, having read prospectus on mines and operational reports, will be familiar with just how large the market for even the tiniest bits of precious metals. People will go to great lengths to recover precious metals – gold, silver and platinum being the most commonly sought.

Precious metals in their smallest form do not normally have nearly the impact that jewelry does on the commodity market. However, as the precious metals investment from the jewelry sector continues to weaken, the amount becomes relatively more important. This is partly due to the increase in the useful technology and unique availability.

If one collects enough of these minuscule precious metals, bullion prices may justify putting such products in the melting pot, but there are markets for many “small” gold products. The uses of precious metals when they are as tiny or thin as dust, flakes or leaf, often represents significant mark-up from the commodity price.

Some of the application of precious metal investing in dust, chips and flakes is in up-and-coming industries that are likely to survive economic troubles due to governmental spending. Green technologies like solar panels and fuel cells currently use platinum dust in what amounts to a large quantity, even in tiny amounts per panel.

Happily, just as there are uses for platinum dust, there is a ready-made source for the platinum that is free for the taking. Platinum is applied to the roads as people drive, as the platinum in the catalytic converter is consumed during driving and fused with unburned hydrocarbons (or lead or any number of metals or reactive organic chemical) to be come road dust. Over time this adds up to a fairly large amount of this extremely rare metal that can be vacuumed up along with all the rest. It would certainly look nice if the roads were kept manicured at a profit.

While gold and silver are more commonly used than platinum, all types of precious metal dust and flakes are able to be recovered from the floors, tables and air filters in rooms where people manufacture jewelry. Though some states, such as California, consider this to be hazardous waste (due to hazardous “fine powder” silica that can permanently damage lungs), other states allow jewelry shops to collect and send their gold dust in for processing into recovered precious metals. Investing in the equipment or processing facilities to recycle platinum, gold and silver is likely a growth industry in an economy that is otherwise on the rocks.

Gold (and silver, to a lesser extent) is used in food items. It is dusted on chocolates and floating in liqueurs. These are also found as incredibly thin precious metal leaf – the very same that is used to cover statues. Sometimes the markup on edible gold and silver flakes is so high that they can be sold at the same price. Professional grade gold foil is usually about twice as expensive when sold as actual gold.

Though it remains to be seen how many people will be so ostentatious as to continue to consume precious metals in this way, The mark-up for one gram of silver “sprinkles” (left over from the foil-making procedure), is over 100-times that of the average 2008 spot price, which was already somewhat high. Food grade “glitter” on the other hand, commands only a fraction of that price.

One may also purchase precious metals to be applied to the outside of the body. Precious metal dust may be used with mica to create a chemical-free, mineral powder. Even in small quantities, a sufficiently fine gold dust can create a dramatic glow that is guaranteed to be hypoallergenic. Precious metal investing will have to take into account formerly minor uses if large swaths of the investing public is going to disappear for any length of time.

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Martha Cooke

March 24, 2009