Got rhodium?

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ommm's picture
ommm
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Joined: Jul 8 2014
Posts: 30
Got rhodium?

Having solid holdings in gold, silver, platinum, palladium, copper, and lead, I've been investigating other metals as potential investments and recently found that one can purchase bars of rhodium in sizes designed for the retail investor. 

http://www.goldline.co.uk/rhodium-bars.page

Given the price history of rhodium, the present geopolitical climate, the geographical sources of rhodium, and some new emerging uses in the defense industry, I've decided to speculate and add rhodium to my physical portfolio.  Anyone else considering a similar investment? 

Jim H's picture
Jim H
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Joined: Jun 8 2009
Posts: 2379
Excellent point regarding real asset diversification OMMM

Rh is hot right now;

RHODIUM 07/23/2014 08:51 1,180.00 1,280.00 +20.00 +1.69%  

I am very open to the idea of diversifying into other high tech enabling metals, realizing that Silver belongs on this list.  

 

  http://rhodiumvault.blogspot.com/p/what-is-rhodium.html

davefairtex's picture
davefairtex
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Posts: 5063
rhodium rhoulette

Ok other than enjoying the alliteration - the rhodium chart.  Right now its a bit above the 2009 lows...at least I don't have the sense we're buying near a high or anything.  And if something interesting were to happen, its a tenbagger at least.

Rhodium production: 30 tonnes per year (about 1M ounces).  80% of use: catalytic converters.  There is 133 times more gold produced each year than rhodium.  Not sure if that reflects scarcity, or demand.  If you buy one ounce, its actually a measurable amount of global production.   And rhodium is cheaper than gold.

[I just looked up scarcity: rhodium is only 4 times more scarce than gold; "fair" price for Rh based on gold 1300 is thus $5200.  Of course by that logic, silver should be $69/oz...perhaps scarcity isn't the best measuring stick...http://en.wikipedia.org/wiki/Precious_metal - or maybe it is, longer term.]

Of course that's only because the Fed is suppressing the price of Rhodium with all those paper rhodium sales from the bullion banks...oh wait, there are no Rhodium futures.  How can this be happening?  :-)

I like the idea, btw.  A rhodium bar.  Not likely you can take it to your local coin shop, but - still.  Seems fun.  And it definitely requires getting physical.

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HughK
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Joined: Mar 6 2012
Posts: 760
Physical rhodium & rare earths

Ommm and all,

Thanks for your post on rhodium.

I looked at buying some small amounts of physical rare earths and decide not to because of the lack of liquidity and because I was not convinced that the online sellers of these products would buy them back without charging a large premium for the transaction.

I wonder if rhodium would be similar.  Do you have any sense if the company you linked (Baird & Co. out of the UK) buys rhodium bars back at a price reasonably close to spot?  Or, do they charge a large premium for buying rhodium back?  Or, do they not buy it back at all?  I sent them an email asking them about their rhodium buyback policy and if I hear back from them, I'll pass the info along.  If anyone else knows much about the liquidity of the rhodium market, I'd be interested to hear of it.

I guess if one was planning to invest a large sum in a rarer metal then the transaction cost might be lower, but I'm interested in the prospects for the modest retail investor (i.e. a few ounces).

Cheers,

Hugh

P.S.  Many of these rarer metals can be acquired in a thin film, or even foil, which can then be sculpted around the cranial hemisphere for enhanced protection against government and/or alien mind-reading waves, much superior to aluminum. We have yet to see Weird Al wrap a sandwich in tantalum foil, but the Age of Limits is still young and much can happen...

HughK's picture
HughK
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Joined: Mar 6 2012
Posts: 760
Rhodium response

Here's Baird & Co's response, sent today regarding Rhodium buyback:

We will buy back any bar or coin we sell.

You can buy from  our retail website as little as 1/10th oz in several major currencies:

http://www.goldline.co.uk/ccySelect.do?ccy=GBP

We can arrange delivery to most countries.

Otherwise, we do have a network of retailers that we can put you in contact with.

 

Our buyback price for a 1 oz Rhodium bar still sealed in its packaging is currently GBP 705.

 

Baird & Co's listed sales price for a 1 oz Rhodium bar today is GBP 856.  So, at that buy and sell price, there is a transaction cost of 17.6%, which is higher than the typical transaction cost for buying gold or silver from a bullion dealer and then reselling it to the same dealer.

 

On the other hand, the chart that Dave shared shows that Rhodium is pretty near the 2009 low and even another modest spike up could make 17% irrelevant fairly easily.

 

Cheers,

Hugh

ommm's picture
ommm
Status: Bronze Member (Offline)
Joined: Jul 8 2014
Posts: 30
Shop around
HughK wrote:

Here's Baird & Co's response, sent today regarding Rhodium buyback:

We will buy back any bar or coin we sell.

You can buy from  our retail website as little as 1/10th oz in several major currencies:

http://www.goldline.co.uk/ccySelect.do?ccy=GBP

We can arrange delivery to most countries.

Otherwise, we do have a network of retailers that we can put you in contact with.

 

Our buyback price for a 1 oz Rhodium bar still sealed in its packaging is currently GBP 705.

 

Baird & Co's listed sales price for a 1 oz Rhodium bar today is GBP 856.  So, at that buy and sell price, there is a transaction cost of 17.6%, which is higher than the typical transaction cost for buying gold or silver from a bullion dealer and then reselling it to the same dealer.

 

On the other hand, the chart that Dave shared shows that Rhodium is pretty near the 2009 low and even another modest spike up could make 17% irrelevant fairly easily.

 

Cheers,

Hugh

Hugh,

For reasons that I don't want to take the time to go into, it wouldn't be wise to do the transaction directly with Baird.  I only used the website as an example since they are the producer.  However, I'm not recommending them as the place to buy.  In the US, you can find spreads in the 9-10% range.  Shop around and not necessarily on the web.  I found my source through a friend of a financial contact.  As an example, I just bought .999 silver today at a fraction under spot.  If you're worried about the spread and liquidity though, rhodium may not be for you.  As I wrote, it's speculative.  I've put less than 0.1% of my portfolio into it and I may hold it for up to 20 years.  Another thing you may want to consider is that it's probably not prudent to count on any dealer ever buying your PMs back from you, despite what may be stated or claimed.  These channels will most likely be clogged when you most want to unload so you'd be wise to develop other exit routes.

 

Michael_Rudmin's picture
Michael_Rudmin
Status: Platinum Member (Offline)
Joined: Jun 25 2014
Posts: 772
Rhodium

I would argue that if you don't know what to do with it, then physical holdings are not a great idea.

Now, if there is a company in your area that uses rhodium, that's one thing: but even then, the salability of your rhodium might be impacted if they go out of business.

On the other hand, investing in the ability to get a certain metal might be a better strategy. For example, if you find out what is necassary to completely recycle a duracell alkaline battery, and then an everready (often, you can hope the process will be the same)... then you should be able to get access to materials without too much trouble.

But one of your batteries, the Lithium battery, is a rare/precious metal. Get to where you can recycle that safely without contaminating your space, and then you have the capability of production from high-grade ore.

ommm's picture
ommm
Status: Bronze Member (Offline)
Joined: Jul 8 2014
Posts: 30
20% run-up in rhodium without a single down day

Michael,

I'm not sure what you mean by not knowing what to do with it.  It would be odd to buy something and not know what to do with it but I guess to each their own.  Personally, I bought rhodium for a number of specific reasons and it has a number of specific uses, one of which has become quite important of as late and has contributed to the run-up.  I typically will speculate only if I have very substantial and actionable information and that is the case here.  So far rhodium has run up 20% in the less than one month period since I bought it without one single down day.  That is a rather rare run for any investment and while I expected the run-up, the unbroken nature of it surprised even me.  I would expect some retracing at this point.  Hope others acted on my hint and reaped the benefits.  The palladium run has been a good one for me and now rhodium is proving profitable as well.  I've searched the archives but I didn't see any recommendation by Chris or Adam to buy either of these although Wildlife Tracker was on the mark with palladium.  I did notice, however, the recommendation of productive farmland as an investment but that market had its day quite a while ago and is now becoming fodder for the Wall Street types,  I would personally steer clear of that market but again, to each their own. 

 

 

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