Precious metal

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A precious metal is a rare, naturally occurring metallic chemical element of high economic value. Chemically, the precious metals are less reactive than most elements. They are usually ductile and have a high lustre. Historically, precious metals were important as currency but are now regarded mainly as investment and industrial commodities. Gold, silver, platinum, and palladium each have an ISO 4217 currency code.

The best-known precious metals are the coinage metals, gold and silver. While both have industrial uses, they are better known for their uses in art, jewellery and coinage. Other precious metals include the platinum group metals: ruthenium, rhodium, palladium, osmium, iridium, and platinum, of which platinum is the most widely traded.[1]

Assortment of precious metals

The demand for precious metals is driven not only by their practical use but also by their role as investments and a store of value. Historically, precious metals have commanded much higher prices than common industrial metals.

Bullion[edit]

Silver 1000oz bar

A metal is deemed to be precious if it is rare. The discovery of new sources of ore or improvements in mining or refining processes may cause the value of a precious metal to diminish. The status of a "precious" metal can also be determined by high demand or market value. Precious metals in bulk form are known as bullion and are traded on commodity markets. Bullion metals may be cast into ingots or minted into coins. The defining attribute of bullion is that it is valued by its mass and purity rather than by a face value as money.[2]

Purity and mass[edit]

A 500 gram silver bullion bar produced by Johnson Matthey

The level of purity varies from issue to issue. "Three nines" (99.9%) purity is common. The purest mass-produced bullion coins are in the Canadian Gold Maple Leaf series, which go up to 99.999% purity. Note that a 100% pure bullion is impossible, as absolute purity in extracted and refined metals is asymptotically approached.[citation needed] Historically, coins had a certain amount of weight of alloy, with the purity a local standard. The Krugerrand is the first modern example of measuring in "pure gold"; it should contain at least 12/11 ounces of at least 11/12 pure gold. Still more bullion coins (for example: British Sovereign) state neither the purity nor the fine-gold weight on the coin but are recognized and consistent in their composition,[citation needed] and many historically stated a denomination in currency (example: American Double Eagle).

Coinage[edit]

Vienna Philharmonic 1oz coin

Many nations mint bullion coins. Although nominally issued as legal tender, these coins' face value as currency is far below that of their value as bullion. For instance, Canada mints a gold bullion coin (the Gold Maple Leaf) at a face value of $50 containing one troy ounce (31.1035 g) of gold—as of May 2011, this coin is worth about $1,500 CAD as bullion.[3] Bullion coins' minting by national governments gives them some numismatic value in addition to their bullion value, as well as certifying their purity.

One of the largest bullion coins in the world is the 10,000 dollar Australian Gold Nugget coin minted in Australia which consists of a full kilogram of 99.9% pure gold. There have been a small number of larger bullion coins, but they are impractical to handle and not produced in mass quantities. China has produced coins in very limited quantities (less than 20 pieces minted) that exceed 260 troy ounces (8 kg) of gold.[citation needed] Austria has minted a coin containing 31 kg of gold (the Vienna Philharmonic Coin minted in 2004 with a face value of 100,000 euro). As a stunt to publicise the 99.999% pure one-ounce Canadian Gold Maple Leaf series, in 2007 the Royal Canadian Mint made a 100 kg 99.999% gold coin, with a face value of $1 million, and now manufactures them to order, but at a substantial premium over the market value of the gold.[4]

Economic use[edit]

1kg Gold bullion (ingots)

Gold and silver, and sometimes other precious metals, are often seen as hedges against both inflation and economic downturn. Silver coins have become popular with collectors due to their relative affordability, and, unlike most gold and platinum issues which are valued based upon the markets, silver issues are more often valued as collectables, far higher than their actual bullion value.

Aluminium[edit]

An initially precious metal that became common is aluminium. While aluminum is the third most abundant element and most abundant metal in the Earth's crust, it was at first found to be exceedingly difficult to extract the metal from its various non-metallic ores. The great expense to refine the metal made the small quantity of pure aluminum more valuable than gold.[5] Bars of aluminum were exhibited at the Exposition Universelle of 1855,[6] and Napoleon III's most important guests were given aluminum cutlery, while those less worthy dined with mere silver.[5] In 1884, the pyramidal capstone of the Washington Monument was cast of 100 ounces of pure aluminum. By that time, aluminum was as expensive as silver.[7] Over time, however, the price of the metal has dropped. The dawn of commercial electric generation in 1882, and the invention of the Hall–Héroult process in 1886 caused the artificially high price of aluminum to drop over a short period of time.

Bismuth and tellurium[edit]

Bismuth and tellurium are the only two metals which have abundances less than 10-8 by mass part (g/g) in the Earth's crust, but which are currently not of high economic value.[citation needed]

Rough world market Price ($/kg)[edit]

Valuable metal Price ($/kg) containing all precious metal names in bold
metalmass abundance[8]Price ($/kg) 2009-04-10[9]Price ($/kg) 2009-07-22[10]Price ($/kg) 2010-01-07[citation needed]
Platinum5 ppb426813765087741
Rhodium1 ppb396804620088415
Gold4 ppb311003059024317
Iridium1 ppb141001296013117
Osmium1.5 ppb134001220012217
Palladium15 ppb8430814013632
Rhenium0.7 ppb740070006250
Ruthenium1 ppb229027305562
Germanium1500 ppb1050[11]1038
Beryllium2800 ppb850[citation needed]
Silver75 ppb437439588
Gallium19000 ppb425[11]413
Indium50 ppb[12]325[11]520
Tellurium1 ppb158.70
Mercury85 ppb18.9015.95
Bismuth8.5 ppb15.4018.19

See also[edit]

References[edit]

  1. ^ Platinum Guild: Applications Beyond Expectation
  2. ^ Gold bullion facts from freegoldtips.com
  3. ^ Gold prices ran around $940 USD in July 2009 according to Kitco Historical Gold Charts and Data. The USD to CAD exchange rate averaged 1.129 in July 2009 according to OANDA Historical Exchange Rates. Although the exact moment that the $1075 figure was determined is unknown, it may be considered a reasonable value for the time.
  4. ^ http://www.e-allmoney.com/article/big_gold_coin.html
  5. ^ a b Aluminum: Common Metal, Uncommon Past, Chemical Heritage NewsMagazine, Winter 2007/8, Vol.27, No.4
  6. ^ Karmarsch, C. (1864). "Fernerer Beitrag zur Geschichte des Aluminiums". Polytechnisches Journal 171 (1): 49. 
  7. ^ George J. Binczewski (1995). "The Point of a Monument: A History of the Aluminum Cap of the Washington Monument". JOM 47 (11): 20–25. 
  8. ^ The abundance of the element, a measure for its rarity, is given in mass fraction as kg in the earth's crust (CRC Handbook). David R. Lide, ed. (2005). "Section 14, Geophysics, Astronomy, and Acoustics; Abundance of Elements in the Earth's Crust and in the Sea". CRC Handbook of Chemistry and Physics (85 ed.). Boca Raton, Florida: CRC Press. 
  9. ^ All given Price ($/kg)s from 10th April 2009 are taken mostly from London Metal Exchange.
  10. ^ Data from 22nd of July 2009 are from the http://www.thebulliondesk.com/
  11. ^ a b c The metal Price ($/kg)s of gallium, germanium, and indium are taken from MinorMetals.com as examples of modern precious metals used for investment / speculation.
  12. ^ Tolcin A. (2012) U.S. Geological Survey Mineral Commodity Summaries 2012.

External links[edit]