We all know that gold is the most famous of the precious metals, but what about the others. Examining the others in detail can help us understand why gold remains the most popular of this group.
What is a precious metal?
Dictionary definitions give us a starting point. The Cambridge Dictionary states a precious metal is “a metal that is valuable and usually rare”. The Collins Dictionary defines it in a similar way: “a precious metal is a valuable metal such as gold or silver”. Merriam Webster takes things a little further: “any of the less common and highly valuable metals (as gold, silver, and the platinum metals)”.
A start perhaps, but we need more to build on. So far, we can see a precious metal is valuable and rare. But why are they valuable?
– Less Reactive
– High Lustre
These properties above must all be used in comparison to other metallic elements. So, one definition of a precious metal could be:
A precious metal is a rare, metallic, chemical element whose properties and uses give it a high economic value. Precious metals tend to be less reactive, more ductile, and have a higher lustre than non-precious metals.
Like so many definitions the above can be open to interpretation, as can confusion with the Noble metals. Both noble metals and precious metals share many members. For now, however, we will focus solely on the precious metals.
What are the precious metals?
The below list is not definitive. There remains some debate as to what is precious or not. But for our purposes here are the precious metals:
Atomic Number: 79
Uses: investment, jewellery, electrical connectors, infrared shielding, coloured glass production, leafing, dentistry, bullion
Key Production Areas: China, Australia, United States, South Africa
Atomic Number: 47
Uses: investment, jewellery, electrical connectors, solar panels, water filtration systems, cutlery, coloured glass production. Derivative uses in catheters and medical instruments, bullion, batteries
Key Production Areas: China, Peru, Chile, Mexico
Atomic Number: 78
Uses: investment, jewellery, electrical connectors, catalytic converters, laboratory equipment, thermometers, dentistry, bullion
Key Production Areas: Canada, Russia, South Africa
Palladium (sometimes called White Gold)
Atomic Number: 46
Uses: investment, jewellery, electrical connectors, hydrogen fuel cells, hydrogen purification, dentistry, groundwater treatment, catalytic converters, small amount of bullion
Key Production Areas: Canada, Russia, United States, South Africa
Atomic Number: 44
Uses: electrical contacts, catalysis, electrochemistry
Key Production Areas: Canada, Russia, South America, United States
Atomic Number: 45
Uses: catalytic converters, jewellery, electrical contacts, alloying agent to improve the corrosion resistance of platinum and palladium, mirrors
Key Production Areas: South Africa, Russia, United States
Atomic Number: 77
Uses: electronics, alloying agent, compasses, watches
Key Production Areas: South Africa
Atomic Number: 76
Uses: alloys used to electrical contacts, instrument pivots and fountain pen nib tipping, hardening platinum alloys
Key Production Areas: Canada, Russia, United States, South America
Atomic Number: 75
Uses: used in high temperature superalloys and catalysts used in lead-free gasoline production
Key Production Areas: Chile
Atomic Number: 49
Uses: compounds used in semi-conductors, photovoltaics, LCD screens
Key Production Areas: China, South Korea, Japan, Canada
For investment purposes only Gold, Silver, Platinum and Palladium are possible, due to their relative ubiquity. The remaining are produced in such small amounts (for example Rhodium production is approximately 30 tonnes per year versus Gold which is well over 3,000 tonnes) that they are too rare to fulfil the required liquidity necessary for investors to take them seriously.
While gold is the most well-known and popular precious metal many observers believe Platinum is the most precious of precious metals. Indeed, it is almost 15x rarer than the yellow metal but still ubiquitous enough, just, to be considered as a part, albeit a small part, of an investment portfolio.
Yet gold has the perfect blend of all the most sought-after precious metal properties and is ubiquitous enough, yet rare enough to be the leading precious metal. In addition, the history and cultural affiliation to Gold so many cultures have mean that it will remain the number one precious metal for centuries to come.