As far as precious metals go, most investors tend to stick to gold and silver. There are many good reasons for this, not least that they’re the most popular of rare metals, and the most easily available for the average investor. Platinum also attracts attention, and palladium gets an occasional nibble.

But these aren’t the only rare and valuable metals available on the market.

The PGMs

Specifically, the exotic platinum group metals (so-called because they’re closely related to platinum chemically) also offer tempting investment targets…if you don’t mind a lot of volatility and relish the challenge of finding someone who will actually sell them to you.

Besides platinum and palladium, the PGM family includes ruthenium, rhodium, iridium, and osmium. Their rarity makes gold seem common as dirt, and to some extent their prices reflect that. Their primary uses are in jewelry manufacture and industrial processes, where they often serve as catalysts in chemical reactions.

platinum precious metals

Most precious metals investors limit their attentions to gold and silver, with a few forays into platinum.

Caveat Emptor

Before we go much farther, let me emphasize that investing in PGMs isn’t for the faint of heart. It’s for tough, experienced investors, those who relish a challenge and don’t mind taking calculated risks. It’s not an option that will appeal to everyone, but you should know that it’s out there.

If the everyday precious metals market is boring to you, this may be one way to spice things up. And the market for these rare metals is worth paying attention to, assuming you’ve got the funds to purchase them.

The Brutal Facts

One of the most important things to understand about the PGM market is that most producers either actively discourage, or at least don’t encourage, investment in these metals. Their reasons are obscure, but may boil down to simple lack of interest.

You see, these metals are largely byproducts of nickel and silver mining and subsequent processing. Production is so limited that they don’t even bother to cast the raw metals into ingots; they leave them as unattractive “sponge,” a mix of metal crystals and air pockets.

Furthermore, there’s no futures market for most PGM metals (rhodium is becoming an exception), so they may fear that selling directly to investors might increase marketplace volatility, which is already substantial.

That being the case, most producers aren’t willing to deal with you unless you’re willing to buy at least 100 troy ounces. That might cost you as much as $170,000, at current spot prices for rhodium.

So Why Bother?

The payoff can be huge if you sit on physical quantities of the metal until the price rises. Demand for all the PGMs has risen steadily in the past few years, and is likely to continue to do so as long as our technology continues to advance along current fronts; and there’s no reason why it shouldn’t.

If you do invest in PGMs, your best bet is to purchase rhodium. It’s easiest to find, and can be had from at least one source (the Cohen Mint) in bars and tiny one-gram coins. As of this writing, the spot price is $1,700 per ounce; but in July 2008, it peaked at about $10,000 per ounce. See the attraction here?

I recommend that you buy ruthenium and iridium as well, if you can find decent prices for them. Affordable osmium is almost impossible to come by at the moment, but that may change. You can keep an eye on the spot prices here:

http://www.platinum.matthey.com/cgi-bin/dynamic.pl?template=historical

Needless to say, if you decide to invest in these rarest of precious metals, keep your finger on the pulse of the market constantly…and strike immediately while the iron’s hot.

 

Tags: