Precious metal
Bullion redirects here. For the town in France, see Bullion, Yvelines. For uses of the word bouillon, see Bouillon (disambiguation)A
precious metal is a rare
metallic chemical element of high
economic value.
Chemically, the precious metals are less
reactive than most elements, have high
luster, and have higher
melting points than other metals. Historically, precious metals were important as
currency, but are now regarded mainly as investment and industrial
commodities.
Gold,
silver,
platinum and
palladium each have an
ISO 4217 currency code.
The best-known precious metals are gold and silver. While both have industrial uses, they are better known for their uses in
art,
jewelry, and
coinage. Other precious metals include the
Platinum group metals:
ruthenium,
rhodium,
palladium,
osmium,
iridium, and
platinum, of which platinum is the most widely traded.
Plutonium and
uranium could also be considered precious metals.
The demand for precious metals is driven not only by their practical use, but also by their role as investments and a
store of value. Palladium is, as of July 27 2006, valued($312.501
USD per
ounce) at a little under half the price of gold ($636.084 USD/ounce), and platinum ($1,229.00 USD/ounce) at around twice that of gold. Silver is substantially less expensive ($11.47 USD/ounce) than these metals, presently at 1/49 the price of gold, but is often traditionally considered a precious metal for its role in coinage and jewelry.
Precious metals in bulk form are known as
bullion, and are traded on
commodity markets. Bullion metals may be cast into
ingots, or minted into
coins. The defining attribute of bullion is that it is valued by its mass and purity rather than by a
face value as
money.Many nations mint
bullion coins, of which the most famous is probably the gold
South African
Krugerrand. Although nominally issued as
legal tender, these coins' face value as
currency is far below that of their value as bullion. For instance, the
United States mints a
gold bullion coin (the
Gold Eagle) at a face value of $50 containing 1
troy ounce (31.1035 g) of gold — as of January 2006, this coin is worth about $550 as bullion. Bullion coins' minting by national governments gives them some
numismatic value in addition to their bullion value, as well as certifying their purity. The level of purity varies from country to country, with some bullion coins of as pure as 99.99% available, such as the
Canadian Gold Maple Leaf. Note that a 100% pure bullion is not possible, as absolute purity in extracted and refined metals can only be
asymptotically approached.
One of the largest bullion coins in the world is the 10,000 dollar
Australian Gold Nugget coin minted in
Australia which consists of a full kilogram of 99.9% pure gold; however
China has produced coins in very limited quantities (less than 20 pieces minted) that exceed 260 troy ounces (8 kg) of gold.
Gold as an investment and
silver as an investment are often seen as a hedge against both
inflation and economic downturn.
Silver bullion coins have become popular with coin collectors due to their relative affordability, and unlike most gold and platinum issues which are valued based upon the markets, silver issues are more often valued as collectables, far higher than their actual bullion value.
A metal is deemed to be
precious if it is rare. The discovery of new sources of ore or improvements in mining or refining processes may cause the value of a precious metal to diminish.
An interesting case of a once-precious metal that is now common is that of
aluminium. Although aluminium is one of the most commonly occurring elements on Earth, it was initially found to be exceedingly difficult to extract from its various . This made aluminium more valuable than gold. Bars of aluminium were exhibited alongside the French crown jewels at the
Exposition Universelle of 1855, and
Napoleon III was said to have reserved a set of aluminum dinner plates for his most honored guests. Over time, however, the price of the metal gradually dropped; the discovery of the
Hall-Héroult process in
1886 caused the high price of aluminium to permanently collapse.
The rarity of other precious metals may shift in the future; the supply deficit of silver - 300 million troy ounces (9 million kg) more silver are currently consumed per annum than are mined - may ultimately cause it to become rarer than gold [
1].
*
Bullion coin*
Gold as an investment*
Silver as an investment*
Ingot*
Gemstone*
Hallmark*
Current Metal Prices*
International Precious Metals Institute
