Rhodium – catch-up potential?
I published a short post on rhodium during the holidays – a time when many readers were away. I have therefore decided to run it again in updated format.
I have been fairly vocal about my bullish view on precious metals for quite a while. And with the nascent correction, I am quite content to ride my positions. However, adding to one’s holdings at decent prices has become problematic as most of the corrections have been shallow, not really affording proper buying opportunities.
Is there a way to still access the precious metals complex at relatively good prices? Perhaps. I have never paid much attention to the lesser known of the platinum group metals (PGMs), namely rhodium, but playing around with some commodity charts on the Global InfoMine site caused me to focus on this somewhat unknown metal. The chart below highlights how severe the plunge of rhodium in 2008 was and how “tame” the subsequent recovery has been, at least when compared with other precious metals.
Source: Global InfoMine
In an attempt to gain some knowledge of rhodium, I have gathered the following information (mostly from a GoldCore article on Seeking Alpha):
It certainly would seem that rhodium is worth a second look, especially if one is bullish on precious metals and believes in urbanization as a major secular theme. Arguing the investment merit is the easy part; investing in rhodium is somewhat more difficult.
The miners involved in the extraction of rhodium are mega companies (Anglo Platinum, Impala Platinum, Xtrata, etc.) with rhodium contributing only a relatively minor portion of their production. Rhodium bars and coins are available through The Cohen Mint, but at a very steep premium of 20.2%. In the absence of exchange-traded funds, the only manner I could identify of investing in rhodium is through a Kitco rhodium pool account or by buying Royal Bank of Scotland perpetual options through the Scoach or Euwax exchanges in Germany (tickers: AA0XEK or AA0XEJ). The best bid-offer spread available at the time of writing is 2.8%
More on this topic (What's this?)
Read more on Precious Metals at Wikinvest
The Sound Money Business: Four Years Past and Future Forecast (Gold Stocks Today, 10/4/14)
Junior Miners Breaking Out Higher Forecasting Gold and Silver Price Bottom? (Gold Stocks Today, 9/15/14)
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