Rhodium is a rare by-product of mining platinum and has grown in popularity and value over the last decade. Mined primarily in South Africa, the precious metal is exceedingly rare, and most of the world’s supply is used for making catalytic converters for cars.
Below is How To Invest In Rhodium In South Africa
There are four options for investing in rhodium. Investors can choose to purchase:
- Rhodium bars
- Rhodium coins
- Rhodium-backed stablecoins
- ETFs
Physical rhodium is most often sold in bullion bars because the coins are difficult to mint given the high melting temperature of rhodium and its tendency to crack during the minting process. That said, if you want the convenience and the sleek and artistic look of a coin, rhodium coins may be right for you. Many rhodium coins on the market contain only a trace of rhodium, combined with other precious metals from the Platinum Group Metals list.
Just a decade ago, it was extremely difficult for investors to buy rhodium. Today, there are numerous ways to invest in rhodium. Investors can purchase physical bars, coins or invest in exchange-traded funds (ETF).
Pros
• Serves as a good long-term hedge
• In demand from the automotive industry
• Frequent price fluctuations make it an attractive option for diversifying your portfolio
Cons
• Expensive
• Short-term vulnerability to price fluctuations that can significantly diminish its value
• The majority of rhodium comes from South Africa, putting the value of rhodium at risk to any geopolitical turmoil in the region
After you consider the pros and cons, if you’re still interested in rhodium investments, various methods for purchasing rhodium exist.
Bars and Coins
At the moment, the best way to buy physical rhodium is in the form of bullion bars. Rhodium coins exist, but they are not significant players in the rhodium bullion markets, so buying cheap rhodium bars is the least expensive way to acquire it. This is because the minting process for coins is extremely hard to attempt when using rhodium. The metal is very difficult to work with due to its high melting point and hardness – often resulting in fractures when the coin is stamped.
Three main brands exist for rhodium bullion, each providing its own physical investment options:
Baird & Co.
Baird & Co. is Britain’s only gold refinery. One of its starring achievements is launching the world’s first legal tender coin made of rhodium: the Tuvaluan $100 coin. They also produce one-ounce rhodium bars made of 99.9% fine rhodium that are more readily available than the Tuvaluan coin.
PAMP Suisse
Another popular option is the rhodium bar produced by PAMP Suisse. The PAMP Suisse Lady Fortuna bars are known for their artistic design and are sought out by collectors as well as investors.
Cohen Mint
If you’re looking to buy rhodium coins, a small number of options exist. Among the few mints available, Cohen mint is the most popular. Its coins come in a tamper-evident case with a label containing technical specifications of the coins. In addition, the case has a security hologram on the back and a certificate of authentication comes with all rhodium coins issued by Cohen mint. However, anyone interested in buying Cohen coins should know they closed their doors years ago, so buying from a third-party supplier is your best bet.
If you’re interested in rhodium investment, but you don’t necessarily want to buy the physical format, there do exist possibilities.
Why Physical Rhodium is so Valuable
Rhodium is among the rarest metals on earth and a vital component of the multi-trillion dollar global automotive industry. The versatile metal is also used in optical instruments, electrical connections, jewelry finishes, and aircraft turbine engines.
Rhodium-plated jewelry has become less popular as the demand for metal has grown. However, a plating of rhodium is still frequently used when photographing jewelry as it gives it a shine that is difficult to achieve with other means and can drive up the price of the piece.
As the world pushes harder toward clean energy sources, the value of rhodium is poised to climb. It is a crucial component used by the automotive industry to produce lower emissions. Rhodium in catalytic converters reduces nitrogen oxide emissions, which have unfavorable effects on human health, agriculture, and ecosystems.
Rhodium is not currently exchange-traded, making it one of the few metals that adhere strictly to supply and demand principles. Given that demand seems likely to continue to increase and the supply cannot keep pace because of its rarity, most experts agree that the price is poised to continue to climb for the foreseeable future.
Given that there is no current substitute for rhodium, and it seems unlikely that supply will increase, adding rhodium to your physical assets investments will help create a diversified portfolio.