Let’s start with a precious metals quiz.
What do you think is the world’s most expensive metal?
Here are some hints:
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It’s one of the most exotic metals in the world
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It’s 100 times rarer than gold — and worth eight times as much
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Regardless of rarity or cost, this metal is crucial to the recovering automobile industry
Give up?
The answer is rhodium.
If you aren’t familiar with rhodium, don’t sweat it. Not many people are. In fact, it was only discovered by investors recently.
Gold bullion — along with silver, platinum and palladium — typically steals the spotlight when it comes to precious metal investing. And while these “Fab Four” metals are a great way to diversify your portfolio and hedge your investments against inevitable inflation, rhodium provides investors with a unique opportunity.
Rhodium — along with platinum and palladium — is a silvery-white metal classified as a Platinum Group Metal (PGM). All PGMs have similar properties, but rhodium is by far the rarest, accounting for only 0.0002 parts per million of the Earth’s crust.
This exceptional metal is sometimes used as a finish for jewelry, mirrors, optical equipment, in electrical connections and in aircraft turbine engines. Yet 80-90 percent of the world’s rhodium supply goes into the production of catalytic converters in automobiles, which are used to clean harmful car exhaust gases.
In just three years, from 2005-2008, the spot price of rhodium increased almost ten-fold, giving investors an average annual return of 240 percent. During the financial crises, the noble metal — which is heavily dependent on the automobile manufacturing industry — flat-lined at around $1,000 per ounce.
But as Future Money Trends points out, lately “the automotive sector has been picking up, especially in the Land of the Rising Sun, where a weaker Yen has made Japanese exports far more competitive.”
When it comes to the supply side of things, one country is responsible for most of the world’s mining of rhodium: South Africa. Because of widespread violence in the region, not to mention frequent political, economic and racial clashes, a consistent stream of rhodium inventory is hardly guaranteed. Consequently, more and more bullish investors are staking their claim in the metal.
As you plan your investment strategy, be sure to keep a close eye on this exceptionally rare and valuable white metal as the market continues to prosper.
If you are interested in getting in on the trend early and making your own claim on one of the rarest metals on Earth, visit our site to learn about diversifying your portfolio with rhodium.
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