Here at Provident Metals, we specialize in buying and selling the best quality precious metals bullion around. But who’s to say when a metal is considered ‘precious’? It certainly isn’t us, nor is it a Gollum-esque character in a cave whispering “my precious” to a piece of jewelry.
In fact, the specifications for an element to be categorized in this exclusive group are quite strict (which perhaps explains why the club has so few members).
For a metal to achieve ‘precious’ status, it must pass these three basic requirements:
Rarity
A precious metal is a naturally-occurring element of high value so seldom found in the Earth’s crust that it is considered exceptionally rare. It is commonly said that the total amount of pure gold ever mined could fit into two Olympic-sized swimming pools. Platinum and palladium are even more scarce.
Copper is often mistaken as a precious metal because of its use in jewelry and currency, but the red metal is far too common to be considered precious.
Metals can also lose or gain “precious” status under certain circumstances. Take aluminum, for example.
Extracting aluminum from the ground used to be a grueling process and refining the metal was next to impossible. These factors made aluminum more expensive than gold at times—despite being the most abundant metal in the Earth’s crust. But as more advanced mining processes made aluminum extraction easier, the metal’s price plummeted and ultimately became categorized as a common metal.
Value
Another necessary attribute for a precious metal is that it must be valuable. Gold, in particular, has been used as currency in almost every major civilization in history, and nowadays gold bullion is valued as a hedge for investors against inflation in times of economic instability.
Silver, platinum, palladium and the other lesser-known precious metals are desired for both their industrial and investment value. Silver, for instance, is used in electronics and solar energy (see our related blog post), while a majority of platinum and palladium is channeled into the auto industry to make catalytic converters in cars.
Composition
Chemically, precious metals tend to be more resistant to corrosion than other elements and less reactive. Precious metals are naturally-occurring compounds, and can be found on the periodic table of elements.
The elemental symbol for gold is Au, and silver—which boasts the highest electrical conductivity of any metal—is Ag. Platinum’s chemical symbol is Pt, and palladium’s is Pd. Both platinum and palladium are part of a larger subgroup of precious metals known as the Platinum Group Metals (PGMs).
And there you have it – as long as a metal is rare, economically valuable and naturally-occurring, it can be considered part of the precious metals family. Tough standards, to be sure. But there’s a reason they’re called precious metals.
Pick your favorite. What precious metal do you prefer and why?
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Patricia says
Hi!
I’m doing a document about jewelry value, in which I want to explain the reason why, in betwenn precious materials, there’s differences of their values. For exemple, why silver is less expensive than gold? because gold is more rare? because is linked to religion and all the past and beliefs in diferent cultures? or because silver is not that good than gold to be worked ( i’m refering to the phisical properties )
Can you explain me that?
Thank you!
(I’m sorry by my English, I’m portuguese)
Ken Mason says
Rhenium should be added to the Precious metal list, 4X higher price than silver, next to the PGM group too between Osmium and Tungsten. Rare,heavy,4th most dense metal/element,2nd highest melting,but malleable unlike tungsten,industrial uses,jet/rocket engines. High quality full density collectible manufactured shapes available for investors/collectors.
Big John says
I’ve been accumulating silver for several years but only today was told my silver Eagles have no numismatic value, only the value of their silver content. I’d believed they were still legal tender in that regardless of the silver content they would always buy $1 worth of goods because they clearly say “one dollar” one each coin. Also, they are produced by the U.S. Mint and so far as I know, no other private mint may produce coins that are labeled “one dollar”. I have many coins from other countries as well such as Canada, Australia, China, and others. Many of these “collectable” coins are marked with some numeric value of those countries legal tender too. However, I was told today that I’ve been wrong, none of these modern coins is money. If true, when and why did that change?
ProvidentMetals.com says
John,
Good news, you’re right! Silver Eagles are still legal tender and their weight and purity are guaranteed by the government, which also means they’re eligible for inclusion to your precious metals IRA. Feel good knowing you won that argument 🙂
Texas A&M (Ag)gies says
Include me in with the vast majority above that loves the look, sound, feel, the experience, the “everything” about Silver (Ag).
Place a Silver coin side by side next to one composed of Gold (Au), and there is no comparison. There is just something about Ag that keeps me coming back for more . . . and more . . . and, well, you get the picture.
Silver is a “consumable” metal in that once it is used in one of its countless number of uses (industrial, medical, etc), that Ag will not be coming back into “circulation.” The same cannot be said of gold; all the gold that has ever been mined by man is still in existence. This is a function of the relative cost of “recovering” the Ag/Au versus the “value/worth” of each metal. Some Ag can NEVER be recovered (e.g., medical, biochemistry, pharmaceuticals); once “consumed” (think silver nitrate, for example), it’s gone.
Take all of these things into account, and then throw in the fact that dollar for dollar, one can currently buy ~ 65 to 70 times as much Ag vis-à-vis Au, and the argument for buying Ag over Au is a no-brainier.
Ps: Silver is a rare metal, a precious metal, an industrial metal, a financial metal. Above all, Ag is a beautiful metal whose price has been and continues to be manipulated like none other, through ETF’s, paper silver, short-sellers, etc.
While others curse those who would like to drive the price of Ag into the ground, I thank them for every opportunity that they provide to me (and those who share my love of silver) to buy Ag at artificially low prices. In the end, I am a BUYER of Ag, and will continue to buy Ag anytime that the “manipulators” (and Mr. Market) decide that the price of Ag will “go on sale” as they attempt to drive the price into the ground.
Nb: I swear that no pun was intended with the preceding sentence, but it couldn’t be any truer and I love the double entendré that I inadvertently wrote.
jason says
Silver..for sure. I’ve been stacking for just a few short years and I’m addicted. My little safe got full and I had to get a bigger one. What a great feeling. 30% of every paycheck goes to buying this Precious metal. Thank you to the political environment and hinky bankers that help bring the price down below $20.00oz. I hope it keeps going down. I’m holding. Take a $20 bill in one hand and an ounce of silver in the other. What one would you rather have in 20 years? It’s a no-brainer.
John says
Gotta agree with Jason here. By all rights, silver “should” be more valuable than gold. That is, if I remember correctly, there’s less silver in the ground, less above ground, it actually has several practical industrial uses such that the demand for silver exceeds supply, and (at least in my opinion) it even looks better than gold in jewelry, coinage, etc. If you buy into the mythical silver:gold ratio thing, then it is severely undervalued. Best part about silver is that it’s affordable (no doubt you’ve heard the phrase “poor man’s gold”). The price of silver is more volatile, to be sure, but that volatility can be an advantage on the upswing. I really don’t understand why gold is so expensive, other than simply because it has 2,000+ years of momentum behind it.
@Jason: Must be nice to still be single. At least I assume you are… no wife on earth would allow 30% of every paycheck to go to bullion purchases instead of spending it on something useless!!! 🙂
John Lane says
I have to agree with John. I would rather collect Silver over Gold. Silver just has a look, feel and sound that no other metal has. I’m still new to the game of numismatics, but this is a great place to start.
John says
Just a quick follow-up to my earlier post…
There is one negative against silver. Although silver is more affordable than gold, you pay more for it. To illustrate:
Today the spot price of gold closed at $1,073.92/ozt. If you were to buy an American Gold Eagle for “as low as” $62.95 over spot as Provident is currently offering, that’s a 5.86% markup. By comparison, the spot price of silver closed at $14.20/ozt. If you were to buy an American Silver Eagle for “as low as” $3.04 over spot, that’s a 21.41% markup!
Using the same spot prices as above, take an OPM 1oz gold bar for $19.95 over spot and compare against an OPM 1oz silver bar for $1.49 over spot, and you’re left with a 1.86% markup versus a 10.49% markup, respectively. Heck, even if you were to get the silver bar on sale for only $0.65 over spot, that’s still a 4.58% markup!
In that aspect, gold has a clear advantage for investors.
Drake Dequeant says
It is very hard for me to choose between gold and silver. I guess I will pick gold. Gold has a long standing as a precious metal for 10,000 years. When the Americas were discovered in 1498, the first thing the Spanish wanted to know is where the gold was. Civilizations and cultures have been destroyed over gold. Gold has been a standard of wealth for every civilization who had access to it and even now there is such a massive demand for it. There may be more gold than silver on earth, but as the old saying goes, gold is gold.
Silver may be undervalued, but lets not fix something that isn’t broken if you know what I mean 😉
William Buron says
Great article. However was a little surprised not to see rhodium as a precious metal ( filed with the PGM’s). It certainly meets all of the criteria.
ProvidentMetals.com says
You’re right about that William, and there are several others as well, but this particular article focused on the big four. We found this article from mining examiner that lists the top 10, could be something that interests you?
http://www.911metallurgist.com/blog/the-worlds-10-most-precious-metals