Category Archives: Platinum

Palladium And Platinum As Investment Commodities

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Palladium and platinum are two of nine metallic chemical elements considered “precious” for their rarity and high economic value. Like all the other precious metals, palladium and platinum have various industrial uses. But apart from these, both are also regarded as investment commodities.

Palladium as an investment commodity:

Palladium is valued at around US$415 per troy ounce. Actually, this is much lower than its price of more than one thousand U.S. dollars per troy ounce in early 2001, when the automobile industry placed a high demand for the precious metal for use as catalytic converters.

As an investment commodity, palladium may be bought in forms of bullion coins or bars. Palladium bullion coins are internationally recognized forms of currency and have the ISO codes XPD and 964. The first known palladium coins to be issued were those of Sierra Leone in 1966. The following year, Tonga started issuing theirs.

Other countries later began issuing their own palladium bullion coins, including Canada (with its Big & Little Bear Constellations and the very popular Palladium Maple Leaf), Australia, France, China, Portugal, and the former Soviet Union. The latter, in fact, is known to have minted the most number of palladium coins in the world.

Because of low circulation of palladium coins, palladium as an investment commodity is not as good as either silver or gold. Another reason for this is the relatively wider spread between the metal’s buying and selling prices.

Palladium is traded on the London Stock Exchange as an exchange-traded fund (ETF), under the ticker symbol LSE: PHPD.

Platinum as an investment commodity:

As of January 2010, platinum is valued at around us$1,555 per troy ounce (a couple years earlier, its price is about 48% higher than this – considered its peak price). Compared with silver or gold, platinum tends to trade at a higher per-unit price because it is scarcer and has lower mine output. The average mine production of platinum is 5 million troy ounces per year. This is lower by about 77 million troy ounces when compared with the annual mine production of gold, and even much lower – by about 547 million troy ounces – when compared with the yearly silver mine production.

Platinum is traded on the London Stock Exchange (as ETF, under the ticker symbol LSE: PHPT) and on the New York Mercantile Exchange. One way of investing in platinum is through platinum ingots. Platinum ingots are first assayed and hallmarked before being sold on commodity markets.

Another way of investing in platinum is through platinum coins. Platinum coins are internationally recognized forms of currency and have the ISO code XPT. However, there are only a few varieties of platinum coins minted, largely because of the cost of platinum and of the difficulty in working with it.

Bullion coins minted from platinum include the Manx Noble (minted from 1983 to 1989), the Canadian Platinum Maple Leaf (1988 to 1999), the Australian Platinum Koala (1988 to the present), the Mexican Libertad (1989 only), and the American Platinum Eagle (1997 to the present). The Chinese Platinum Panda were minted in three periods: from 1988 to 1990, 1993 to 1997, and lastly from 2002 to 2005.

Platinum accounts are offered by most banks in Switzerland. Here, platinum is treated like any other foreign currency; that is, it can be bought or sold instantly. However, bank clients are not entitled to ownership of the physical metal. Instead, they have a claim against their banks for a specified quantity of the metal.

Platinum: Most Widely Traded Of The Platinum Group Metals

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In the periodic table of the chemical elements, six metallic elements – all transition metals – are clustered together and lie in the d-block (the d-block in the periodic table refers to groups 8, 9, and 10, periods 5 and 6). These six elements are collectively referred to as the platinum group metals.

Of this group of metals, platinum is considered the most widely traded, as it is extensively used in the following: catalytic converters; dental alloys and other dentistry equipment; electrical conductors; resistive thermal devices, laboratory dishes and such other equipment capable of resisting chemical attack even in high temperature; and, of course, jewelry.

As a transition element, platinum is gray-white in appearance. Often because of this, it is mistaken for silver. Its other physical characteristics include its being malleable, ductile, and dense. But while platinum is generally resistant to corrosion, it is corroded by certain elements, such as cyanides (potassium cyanide or sodium cyanide), caustic alkalis, sulfur, and any of the five halogens (astatine, bromine, chlorine, fluorine, and iodine).

The following lists some of the properties of platinum:

General:
• Chemical Symbol: Pt
• Atomic Number: 78
• Category (as an element): Transition Metal
• Group/ Period/ Block (in the Periodic Table): 10/ 6/ d
• Atomic Weight: 195.084 g.mol-1
• Electron Configuration: [Xe] 4f14 5d9 6s1

Physical:
• Density (near room temperature): 21.45 g.cm-3
• Liquid Density (at melting point): 19.77 g.cm-3
• Melting Point: 1768.3°C, 3214.9°F, 2041.4°K
• Boiling Point: 3825°C, 6917°F, 4098°K
• Heat of Fusion: 22.17 kJ.mol-1
• Heat of Vaporization: 469 kJ.mol-1

Atomic:
• Oxidation States: 6, 5, 4, 3, 2, 1, -1, -2
• Electronegativity: 2.28 (Pauling scale)
• Atomic Radius: 139 picometre
• Covalent Radius: 136±5 picometre
• Van der Waals Radius: 175 picometre
• Ionization Energies: 870 kJ.mol-1 (first), 1791 kJ.mol-1 (second)

Platinum is known to occur as only three thousandth parts-per notation (0.003 ppm) in the Earth’s crust. This makes it an extremely rare metal.

Compared to gold, platinum is more precious, although its price is considered more volatile. One of the reasons for this is that its demand is driven by industrial uses or applications. For example, its price tends to be double that of gold’s when world economy is stable, but significantly goes down in times of economic uncertainty.

Because it’s wear-resistant and does not tarnish, platinum is highly valued by jewelers, especially watchmakers. In 2008, its price went up to as high as 2,252 U.S. dollars per troy ounce.

Being rare and, therefore, very precious, platinum has been made synonymous to things that are considered “of the highest quality”. We hear for instance of a platinum debit card holder enjoying a wide range of privileges; or of a platinum award being handed out to a music album that has sold over a million copies.

Platinum’s rarity and preciousness has been so pronounced in fact as early as the Eighteenth century, that then French King Louis XV even made a declaration making platinum “the only metal fit for a king”.

The Six Precious Metals Of The Platinum Group

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In the periodic table of elements, six metallic elements are bunched together in the d-block, specifically in groups 8 to 9, periods 5 and 6. All transition metals, these six elements are collectively referred to as the “platinum group metals”. These precious metals tend to occur with one another in mineral deposits. Likewise, they are alike in both chemical and physical properties.

In the order of their arrangement in the periodic table, the six metallic elements of the platinum group are ruthenium, rhodium, palladium, osmium, iridium, and platinum. A brief description of each of these precious metals is provided below.

1. Ruthenium – This element is represented by the symbol Ru. Its atomic number is 44. It is mostly found in platinum ores and often used in platinum alloys as a catalyst. Its two main physical characteristics refer to its hardness as a metal and to its silvery-white color. The former characteristic makes ruthenium ideal for use in making wear-resistance electrical contacts. The price of this precious metal as of January 2010 is estimated to be about USD173 per troy ounce (USD5,562 per kilogram).

2. Rhodium – This element is represented by the symbol Rh. Its atomic number is 45. Its occurrence is similar to that of ruthenium, and its primary use is as a catalytic converter. Rhodium is considered perhaps the rarest element. It is also known to be the most expensive precious metal, with a price estimated to be about USD2,750 per troy ounce (USD88,415 per kilogram) as of January 2010.

3. Palladium – This element is represented by the symbol Pd. Its atomic number is 46. It is also considered one of the rarest precious metals. Palladium closely resembles its co-member in the platinum group – platinum. It is soft and is silvery-white in color. Like rhodium, palladium is largely used as a catalytic converter. As of January 2010, the price of this metal is estimated to be approximately USD424 per troy ounce (USD13,632 per kilogram).

4. Osmium – This element is represented by the symbol Os. Its atomic number is 76. It is found in nature as an alloy in platinum ores. Osmium is considered the densest natural element. It is brittle and is blue-gray in color. Because of its hardness, osmium is alloyed with the other metals in its group and used in electrical contacts and high-quality fountain pen tips. The price of osmium, as of January 2010, is about USD32.15 per troy ounce (USD12,217 per kilogram).

5. Iridium – This element is represented by the symbol Ir. Its atomic number is 77. Like osmium, iridium is very hard and brittle; it has a different color though – silvery-white. Its principal use is for electrical purposes, mainly because of its density and its high resistance to corrosion even at extremely high temperatures. Iridium is considered the fourth least abundant element in the Earth’s crust, after rhenium, ruthenium, and rhodium. Its price is estimated to be about USD408 per troy ounce (USD13,117 per kilogram) as of January 2010.

6. Platinum – This element, after which this group of precious metals is named, is represented by the symbol Pt. Its atomic number is 78. Platinum is dense, ductile, and malleable; it is gray-white in color. Known to be highly resistant to corrosion, this precious metal is used in jewelry, electrical contacts, and laboratory equipment. Its price, as of January 2010, is USD1,555 per troy ounce (USD49,995 per kilogram), making it the second most expensive precious metal, after rhodium.

Evident from the description of each of these six precious metals is that all of them have outstanding catalytic properties and high resistance to tarnish and wear. These characteristics make any of them well suited for fine jewelry. Additionally, their excellent resistance to extremely high temperatures makes them ideal for many different industrial uses.

The Four Platinum Bullion Coins: A Brief Description Of Each

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Bullion coins are coins made from precious metals. Their market values are determined by their inherent precious metal contents. As such bullion coins are mainly kept as investments or stores of value.

Most of the bullion coins available are made from silver or gold. A few also come in platinum though, including the American Platinum Eagle, the Canadian Platinum Maple Leaf, the Australian Platinum Koala, and the Manx Noble. Here’s a quick rundown of each of these four platinum bullion coins:

The American Platinum Eagle:

The American Platinum Eagle bullion coins were first minted and released in 1997 by the United States Mint. They are offered in four varieties:

1. 1/10 ounce (oz.) coin – With a face value of USD10, 3.112 grams (g) in weight, 0.95 millimeters (mm) thick, and 16.5 mm in diameter.
2. 1/4 oz. coin – With a face value of USD25, 7.78 g in weight, 1.32 mm thick, and 22 mm in diameter.
3. 1/2 oz. coin – With a face value of USD50, 15.56 g in weight, 1.75 mm thick, and 27 mm in diameter.
4. 1 oz. coin – With a face value of USD100, 31.12 g in weight, 2.39 mm thick, and 32.7 mm in diameter.

All coin varieties consist of 0.9995 fine platinum. One interesting feature of the American Platinum Eagle coin is that its reverse design changes every year.

The Canadian Platinum Maple Leaf:

The Canadian Platinum Maple Leaf bullion coins were issued from 1988 until 2002 by the Royal Canadian Mint (RCM). They were offered in four varieties: 1/10 oz. coin (with a face value (FV) of CD5), 1/4 oz. coin (FV: CD10), 1/2 oz. coin (FV: CD20), and 1 oz. coin (FV: CD50).

Two additional varieties, 1/20 oz. coin (FV: CD1) and 1/15 oz. coin (FV: CD2), were issued by RCM, but only in 1994. In 2009, the 1 oz. coin was reintroduced. All coins, which have legal tender status in Canada, consist of 0.9995 pure platinum.

The Australian Platinum Koala:

The Australian Platinum Koala bullion coins were first released in 1988 by the Perth Mint, the oldest currently operating mint in Australia. The coin comes in 1 oz. variety, with a face value of AD100. As with most other bullion coins, this value is much lower than the coin’s bullion value.

On the coin’s obverse is a koala, in sunken relief (i.e., lowered from the coin’s plane); on the reverse is Queen Elizabeth II. The coin has legal tender status in Australia.

The Manx Noble:

The Manx Noble platinum bullion coins were minted from 1983 to 1989 by the Pobjoy Mint, the leading private mint in Europe. The coins were offered in five varieties:

1. 1/20 oz. coin – With 1.555 g platinum content, 1.556 g in weight, and 13.9 mm in diameter.
2. 1/10 ounce coin – With 3.11 g platinum content, 3.112 g in weight, and 16.5 mm in diameter.
3. 1/4 ounce coin – With 7.776 g platinum content, 7.78 g in weight, and 22 mm in diameter.
4. 1/2 ounce coin – With 15.552 g platinum content, 15.6 g in weight, and 27 mm in diameter.
5. 1 ounce coin – With 31.103 g platinum content, 31.119 g in weight, and 32.7 mm in diameter.

The coins have no currency value. Their value, rather, is equal to their respective platinum contents. All coins consist of 0.9995 pure platinum.

On the coin’s obverse is Queen Elizabeth II, along with these texts: “ISLE OF MAN” and “ELIZABETH II”. On the reverse are a Viking ship, the denomination, platinum content, and the words “Platinum fine”.

The Eight Precious Metals Considered Noble Metals

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Most metallic chemical elements are known to easily oxidize and corrode, especially at high temperatures. Metals that have excellent resistance to oxidation and corrosion, even at high temperatures, are called noble metals. While there is no strict definition for this group of metals, it usually includes those that are extremely rare.

Thus, metals that are labeled “precious” are also considered noble metals (note, however, that noble metals are not necessarily precious metals). There are nine known precious metals – gold, platinum, iridium, palladium, osmium, silver, rhodium, ruthenium, and rhenium. With the exception of the latter, all are considered noble metals.

Using the “aqua regia” test (aqua regia is a mixture of concentrated nitric acid and concentrated hydrochloric acid, which is highly corrosive), here’s how the eight precious-noble metals react:

• Gold, platinum, palladium, and osmium dissolve.
• Ruthenium dissolves only in the presence of oxygen.
• Rhodium dissolves only when it is in a fine, pulverized form.
• Iridium and silver do not dissolve under any condition.

In another definition, noble metals may refer to electrically conductive elements. Here, the term “noble” serves as a modifying word, such that the electrical conductivity of materials is graded from noble to active. Using this definition for noble metals then, we will find that silver is less noble than, say, graphite (although graphite is an elemental form of carbon and, therefore, is not considered a metal).

Below is a comparison of the chemical nobility of the precious metals (again, excluding rhenium), with details of their specific electronic configurations, simplified reactions (as per the pH diagram), and electrode potentials. The list is presented in order of increasing atomic number.

1. Ruthenium – VIIIb/5; Ru -> Ru2+ + 2 e-; 0.455 V
2. Rhodium – VIIIb/5; Rh -> Rh2+ + 2 e-; 0.600 V
3. Palladium – VIIIb/5; Pd -> Pd2+ + 2 e-; 0.987 V
4. Silver – Ib/5; Ag -> Ag+ + e-; 0.7996 V
5. Osmium – VIIIb/6; Os + 4 H2O -> OsO4 + 8 H+ + 8 e-; 0.838 V
6. Iridium – VIIIb/6; Ir -> Ir3+ + 3 e-; 1.156 V
7. Platinum – VIIIb/6; Pt -> Pt2+ + 2 e-; 1.18 V
8. Gold – Ib/6; Au -> Au3+ + 3 e-; 1.498 V

The second item appearing after the name of the metal (the three items are separated by semi-colons) represents the metal’s reaction in water. In the pH diagram, the pH symbol is labeled on the horizontal axis to signify the -log function of the concentration of H+ ion. The lines, which represent equilibrium for the concentration, are drawn for ions at unit activity. Other concentrations may be represented by additional lines. The voltage potential is represented by a vertical axis, which is labeled Eh, where “h” stands for hydrogen.

Physics has an even more strict definition for noble metals. Here, it is required that the electronic structure’s d-bands are filled. If this definition is followed, only gold and silver (among the precious metals) qualify as noble metals. Also note that the varying reactivity of the precious metals can readily be observed while preparing their surfaces in the vacuum regime called ultra high vacuum.