Rhodium Investment: The Rarest of Precious Metals

Rhodium is the rarest precious metal that is available in the world today. Even though gold and silver are more popular, rhodium is more rare and is worth more than either of them. Investing in rhodium is not as easy as it is to invest in gold or silver, but it is possible. Here are a few things to consider about investing in rhodium.

Rhodium

Rhodium is a precious metal that is very similar to palladium. Rhodium is most frequently used in the automobile industry. It is also commonly used in jewelry as well. The automobile industry uses rhodium to make catalytic converters. This precious metal helps to convert carbon monoxide to carbon dioxide and make the emissions from cars less dangerous for the environment. 

How it is Acquired

One of the strange things about rhodium is that there are no mines that are dedicated to mining rhodium. Instead, they have to mine for gold or silver and then get the rhodium out of what they take. The rhodium is extracted from the gold and silver. This makes it one of the most difficult precious metals to obtain. 

Volatility

If you are planning on investing in rhodium, you will want to make sure that you understand how volatile it really is. Rhodium is one of the most volatile investments that is currently available. It can be sky high one day and plummet drastically the next day. If you are going to get involved with this type of investment, you want to make sure that you can handle a lot of volatility and risk. Otherwise, you are most likely not going to enjoy your time as a rhodium investor.

Buying Rhodium

Unless you are an institutional investor or a manufacturing firm, it is very difficult to buy rhodium directly. This is because there is such a large level of competition for the available supply, and it is difficult to get involved. However, if you want to invest in rhodium, you can get involved with a pool account. This is where multiple investors work together in order to buy rhodium. This way, they have a little bit more power in numbers than they would if they only worked individually. 

Spreads

When you are about to invest in rhodium, one thing that you will want to pay attention to is the spread. The spread is the difference between what you can buy rhodium for and what you can sell it for. It is not uncommon to find spreads of 20 to 25 percent of the value of what you are trading. This means that you may have to hold onto the rhodium for a certain amount of time in order to make up the amount of money that you lost on the spread to the broker. The spreads are flexible and they tend to get bigger when the market for rhodium is more volatile. Therefore, this market is going to require some patience on your behalf if you want to be successful.

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