Tag Archives: precious metals

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.

Bullion: Mass Of Precious Metals

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Bullion is a mass of any one of the known precious metals. By strict definition, precious metals are those metallic elements that are rare. Bullion is commonly made of either gold or silver. Its value is determined by the worth of the metal rather than by its face value as money.

To put it another way, bullion is valued based on the mass and purity of the metal used, instead of its artificial currency value.

New sources of ore have been discovered and there also have been improvements in the mining and refining processes. These two factors may cause the values of gold, silver, and the other precious metals to diminish. Also, the “precious” qualification of a metal is determined by the market value or high demand.

Bullion is traded on commodity markets in two forms: bulk ingots or coins, the latter minted by the government of a country. At least ten countries are known to mint gold and silver bullion coins. These are Australia, Austria, Canada, China, Mexico, Poland, South Africa, Switzerland, the United Kingdom, and the United States.

While bullion coins are issued as legal tender, with nominal values assigned to them on minting, such face values are far below the commodity value of the metals themselves. Here’s an example: Most of the gold coins issued by national governments, particularly those with currency values of between 10 and 100 U.S. dollars, usually contain no less than 31 grams of gold. On the average (considering the consistent rise in the exchange rate of gold), the value of gold is around USD12 per gram. Here, it is clear that the currency value assigned by the government to a gold bullion coin has no meaning.

Below is a list of some of the government-issued gold and silver bullion coins:

1. Australian Gold Nugget, Lunar Series I, and Lunar Series II
2. Austrian Philharmoniker
3. Canadian Maple Leaf
4. Chinese Gold Panda
5. Mexican Centenario, Libertad, and Onza
6. Polish Orzel bielik
7. South African Krugerrand
8. Swiss Vreneli
9. British Britannia and Sovereign
10. American Buffalo, American Eagle, and Double Eagle

The 10,000-dollar Australian Gold Nugget is one of the world’s largest bullion coins. Minted by the Australian government, this bullion coin is made of 1 kilogram of 99.9% pure gold. Some other bullion coins larger than the Australian Gold Nugget have come out. However, these are not produced in mass quantities and are not practical to handle. Two examples are given here: One is the 100,000-euro Vienna Philharmonic, minted in 2004, which contains 31 kilograms of gold; the other is the 1 million-dollar Canadian Maple Leaf, minted in 2007, which contains 100 kilograms of gold.

Three factors – metal, purity, and weight – affect the value of bullion. The overall value of bullion is determined by the metal used. We know, of course, that platinum is worth more than gold, which, in turn, is worth more than silver. It is easy to understand, therefore, that silver bullion coins have become popular with collectors because of their relative affordability.

Palladium: Least Dense Of The Platinum Group Metals

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Palladium is a rare precious metal characterized by its lustrous silvery-white appearance. It was discovered by the English chemist William Hyde Wollaston in London, England in 1803, along with his discovery (together with Smithson Tennant, another English chemist) of the other metals in the platinum group. The name “palladium” was coined by Wollaston from the asteroid named “Pallas”.

Of the different precious metals in the platinum group (which includes iridium, platinum, osmium, rhodium, and ruthenium), palladium is known to be the least dense. It likewise has the lowest melting point.

Palladium is utilized in many applications because of its unique properties, some of which are provided below.

General:
• Chemical Symbol: Pd
• Atomic Number: 46
• Category (as an element): Transition Metal
• Group/ Period/ Block (in the Periodic Table): 10/ 5/ d
• Atomic Weight: 106.42 g.mol-1
• Electron Configuration: [Kr] 4d10

Physical:
• Density (near room temperature): 12.023 g.cm-3
• Liquid Density (at melting point): 10.38 g.cm-3
• Melting Point: 1554.9°C, 2830.82°F, 1828.05°K
• Boiling Point: 2963°C, 5365°F, 3236°K
• Heat of Fusion: 16.74 kJ.mol-1
• Heat of Vaporization: 362 kJ.mol-1

Atomic:
• Oxidation States: 0, +1, +2, +4, +6
• Electronegativity: 2.2 (Pauling scale)
• Atomic Radius: 137 picometre
• Covalent Radius: 139±6 picometre
• Van der Waals Radius: 163 picometre
• Ionization Energies: 804.4 kJ.mol-1 (first), 1870 kJ.mol-1 (second), 3177 kJ.mol-1 (third)

Palladium is used in the following:
1. Catalytic converters;
2. Jewelry and watch making;
3. Dentistry and surgical instruments;
4. Aircraft spark plugs;
5. Electrical contacts;
6. Connector platings;
7. Manuscript illumination.

Since the late 1930s, palladium has been utilized as a precious metal in jewelry. Because of its naturally white properties, palladium has been used as an alternative to white gold. Along with silver and nickel, palladium is popularly used in making white gold alloys.

According to the British Geological Survey (BGS), the top four palladium-producing countries in the world are Russia, South Africa, Canada, and the United States (in this order). Russia produces at least half of the total amount of palladium produced in the world.

Commercially, palladium is produced from copper-nickel deposits in Siberia, South Africa, and in Ontario in Canada. The precious metal is also found – alloyed with the other metals in the platinum group as well as with gold – in Ethiopia, Australia, North and South America, and in the Ural Mountains in Russia.

The Norilsk Nickel Mining and Metallurgical Company in northern Russia is the largest single producer of palladium in the world. Significant amounts of mineable palladium are also found in two other places: the Lac des Îles igneous complex in northwestern Ontario, Canada and the Stillwater igneous complex in the state of Montana in the United States.

Such is the rarity and preciousness of palladium that many metric tons of ore have to be processed to obtain just a troy ounce of the precious metal. The ISO currency codes of palladium, as a commodity, are XPD and 964. Its price is approximately 150 U.S. dollars per troy ounce.

Silver: Precious Metal With The Highest Thermal And Electrical Conductivity

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Silver is generally described as a soft, white, lustrous metallic chemical element. It occurs naturally in its pure form, as an alloy with other metallic elements (especially gold), and in chlorargyrite and other minerals. As one of three coinage metals (the other two being copper and gold), silver is very malleable and ductile.

Of the different metals, silver is known to have the highest thermal conductivity. Similarly of the different known elements, silver has the highest electrical conductivity. Provided below are some of the properties of this precious metal.

General:
• Chemical Symbol: Ag
• Atomic Number: 47
• Category (as an element): Transition Metal
• Group/ Period/ Block (in the Periodic Table): 11/ 5/ d
• Atomic Weight: 107.8682 g.mol-1
• Electron Configuration: [Kr] 4d10 5s1

Physical:
• Density (near room temperature): 10.49 g.cm-3
• Liquid Density (at melting point): 9.320 g.cm-3
• Melting Point: 961.78°C, 1234.93°F, 2041.4°K
• Boiling Point: 2162°C, 3924°F, 2435°K
• Heat of Fusion: 11.28 kJ.mol-1
• Heat of Vaporization: 250.58 kJ.mol-1

Atomic:
• Oxidation States: 1, 2, 3
• Electronegativity: 1.93 (Pauling scale)
• Atomic Radius: 144 picometre
• Covalent Radius: 145±5 picometre
• Van der Waals Radius: 172 picometre
• Ionization Energies: 731 kJ.mol-1 (first), 2070 kJ.mol-1 (second), 3361 kJ.mol-1 (third)

Despite having higher electrical conductivity than copper, silver isn’t as much used for electrical purposes as copper is. There are two reasons for this: first is that silver has a greater tendency to tarnish; and second is that silver is much more expensive.

As a precious metal, silver has been much valued for ages with its so many applications, as in the following:

1. Jewelry (sterling silver is used in making fine jewelry and watches).
2. Silverware (sterling silver is also used in making utensils, tableware and ornaments).
3. Photography (silver nitrate and silver halides are used in making films).
4. Electrical and electronic products (silver paints are used in making printed circuits; silver electrical contacts are used in making computer keyboards).
5. Dentistry (silver-mercury alloy is used in making dental amalgams).
6. Optics and mirrors.
7. Various industrial and commercial uses (silver is ideal for use as a catalyst in chemical reactions).
8. Clothing (silver ions are mixed with the polymer to make yarns).
9. Medicine (silver compounds and silver ions have toxic effect on some viruses, fungi and bacteria, but not on humans).
10. Currency or coinage (as in silver bullion).

The principal sources of silver are copper, lead, zinc and gold ores. It also occurs in the minerals chlorargyrite and argentite. Of course, silver occurs natively, too. Some of the top silver-producing countries in the world are the United States, Canada, Peru, and Mexico. Fine silver, which has no less than 99.9% silver, is available commercially.

Because of competing store-of-value and industrial demands, the price of silver has fluctuated considerably over the last century. As of the beginning of 2010, the price of this precious metal is estimated at about 18 U.S. dollars per troy ounce (or 588 U.S. dollars per kilogram).

Osmium: The Densest Precious Metal

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Osmium is an extremely hard, brittle, bluish white or gray transition metal in the platinum group metals. It is the densest natural element, being about 0.03 g/cm3 denser than iridium (the second densest natural element) and about twice as dense as lead. Among the platinum family members, osmium has the highest melting point and the lowest vapor pressure.

This precious metal is nearly impossible to fabricate. When alloyed with some of the other metals in the platinum group, such as iridium or platinum, osmium is used in certain applications where extreme hardness and durability are required. A couple examples of these are for electrical contacts and for tips of high quality fountain pens.

Some of the properties osmium possesses are outlined below.

General:
• Chemical Symbol: Os
• Atomic Number: 76
• Category (as an element): Transition Metal
• Group/ Period/ Block (in the Periodic Table): 8/ 6/ d
• Atomic Weight: 190.23 g.mol-1
• Electron Configuration: [Xe] 4f14 5d6 6s2

Physical:
• Density (near room temperature): 22.59 g.cm-3
• Liquid Density (at melting point): 20 g.cm-3
• Melting Point: 3033°C, 5491°F, 3306°K
• Boiling Point: 5012°C, 9054°F, 5285°K
• Heat of Fusion: 57.85 kJ.mol-1
• Heat of Vaporization: 738 kJ.mol-1

Atomic:
• Oxidation States: 8, 7, 6, 5, 4, 3, 2, 1, 0, -1, -2
• Electronegativity: 2.2 (Pauling scale)
• Atomic Radius: 135 picometre
• Covalent Radius: 144±4 picometre
• Ionization Energies: 840 kJ.mol-1 (first), 1600 kJ.mol-1 (second)

The name “osmium” was derived from the Greek word “osme”, which means “smell”. It was discovered by the English chemists William Hyde Wollaston and Smithson Tennant in London, England in 1803. Wollaston’s and Tennant’s discovery of the element involved the discovery as well of the other elements in the platinum group.

With an average mass fraction of 0.05 parts-per notation in the continental crust, osmium is known to be one of the least abundant elements in the Earth’s crust. It is found in nature in natural alloys or as a pure element. Similar to the other precious metals in the platinum group, osmium can be found in alloys with copper or nickel.

The extreme toxicity and volatility of osmium’s oxide makes it nearly impossible for this element to be used in its pure state. For this reason, it is often necessary to alloy osmium with other elements for use in high-wear applications. For example, osmiridium (a natural alloy of osmium and iridium) is alloyed with the other metals in the platinum group and used in instrument pivots and phonograph needles (apart from electrical contacts and fountain pen tips as mentioned earlier). In another example, osmium tetroxide is used to detect fingerprints and to stain fatty tissue for optical and electron microscopy.

Osmium occurs in the platinum-bearing river sands in North America, South America, and in the Ural Mountains in Russia. The latter, in fact, is known to be the site of the second largest alluvial deposit, which today is still mined. The approximate price of commercial osmium (99 percent pure osmium powder) is 100 U.S. dollars per gram.