Category Archives: Precious Metals

Understanding the Geology of Silver

10 Gram Silver Bar
10 Gram Silver Bar

Silver – Overview 

This soft, white, precious metal is valued for its beauty and industrial uses. It has a history that goes back as far as 4,000 B.C. Around the same time, techniques to refine silver and separate it from other metals were identified and practiced. As research on natural elements progressed, silver got its chemical name and secured its position in the periodic table in group 11 and period 5. For our science enthusiasts, this malleable metal has the following element properties: 

    • Atomic Number – 47
    • Atomic Weight – 107.8
    • Melting Point – 1,861.4oF
    • Boiling Point – 4,014oF
    • Specific Gravity – 10.5
    • Luster – Metallic
    • Mohs Hardness – 2.5 to 3 

Because of its rarity and high industrial demand, silver is considered a precious metal with a high economic value. Its physical properties make it the best possible metal for various uses in a wide variety of industries. 

For starters, it has electrical and thermal conductance that is higher than any other metal, which makes it valuable in the electronic industry.  Silver is also sort after because of its exceptional ability to convert ethylene into its oxide, a prerequisite of many organic compounds. However, it is the least reactive of the transition elements.

Moreover, it has better reflectivity at most temperatures. Finally, its color and attractive finish make it a desirable choice for coins, tableware, jewelry and many other objects.

Given its uses and properties, silver is often the material of choice. However, unlike other precious metals, the value of silver is often not reflected in the price, which makes it one of the most underrated precious metals.

Let’s take a closer look at how silver is found in nature.  

The Geology of Silver 

The precious metal occurs in nature as one of the four following forms.

  • as a natural element; 
  • as an essential component of silver minerals; 
  • as an alloy with other metals; and 
  • as a trace element in the ores of other metals. 

Below we intend to understand the geology of the precious metal better.

Silver as a Natural Element 

Silver rarely occurs as a natural element. Instead, it is often found with other metals, including gold, copper, quartz and sulfides and other metals’ arsenides. In placer deposits, silver is rarely discovered in significant amounts. Because it does not oxidize readily, silver can also be found above the ores of other metals in its natural state. However, the precious metal reacts with hydrogen sulfide that results in a discolored surface, including silver sulfide, also known as acanthite. Researchers have found many specimens as a natural element that have been exposed and reacted with hydrogen, and have an acanthite coating.

Silver in this form is often associated with hydrothermal activity. In areas of abundance in this activity, silver can be found as cavity fillings. Some of these deposits are rich enough to support mining. However, mining for silver alone is often not feasible. Therefore, the economic viability of silver extraction depends upon the presence of other valuable minerals. For extraction of such deposits, an underground operation is undertaken that follows the veins and cavities where silver in its natural state is found. 

As an Essential Component of Silver Minerals

Close up of Silver CoinsThere is a surprisingly high number of minerals that contain silver as an essential component. There are over 35 different distinct silver minerals which include but are not limited to the following. 

  • Acanthite, 
  • Berryite, 
  • Chlorargyrite, 
  • Dyscrasite,
  • Empressite, 
  • Fettelite, 
  • Petzite, 
  • Samsonite

Each of the silver minerals is distinct and rare, however, a few silver minerals exist in quantities that warrant mining. Silver minerals can be found as silicates, sulfides, iodates, carbonates, oxides, nitrates and bromates. 

Alloys and Amalgams of Silver 

If you take a closer look at the placer deposits of gold, you will find gold alloyed with small quantities of silver. When the ratio between gold and silver reaches at least 20% silver, the alloy is called “electrum” which is a combination of silver and gold. When gold is refined and purified, that leads to the production of a significant amount of silver. Interestingly enough,  most of the silver available on the market today is a byproduct of gold extraction and purification.

The metal can also be found as a natural alloy of mercury, which is found in the oxidation zones of silver deposits. This amalgam of silver is also associated with cinnabar, which is a toxic mercury sulfide mineral. 

As a Trace Element in the Ores of Other Metals

The other most common source of silver is its occurrence as a trace element in the ores of other metals. It is often found along with other commonly extracted metals, including copper, lead and zinc and can be found as an inclusion within the ore. Moreover, it can be found as a substituted metal ion within the ore’s atomic structure. However, there is a possibility that the value of silver may exceed the value of the primary metal within the ore.

Silver – Extraction and Production Around the World 

Silver is found all around the world. Over 50% of its production comes from North, Central and South America. Other contributors of silver outside America include Russia, China and Australia. 

Silver deposits are usually associated with magmatic and hydrothermal activity. Major mineral deposits are therefore found in these regions. The association between geothermal activity and silver deposits is more pronounced in the Americas, where the silver production follows the Andes Mountain Range. In other parts of the world, the production of silver is related to igneous activity regardless of its geologic age, but a different trend has been observed in Europe, where silver production is associated with historic volcanic activity. 

Conclusion 

Silver is a precious metal with various industrial and commercial uses. While its worth is often not reflected in its economic value, silver still remains a rare, precious metal, given how it is found in nature. 

Palladium – A Metal More Precious than Gold

Overview

Pallidum Metal
Hi-Res Images of Chemical Elements, CC BY 3.0, via Wikimedia Commons

You might have noticed that palladium is listed in the metal exchanges along with gold and platinum. That is because it is one of the most precious metals found on Earth. Palladium is a silvery, shiny metal that gives color to white gold. It was discovered in 1803 by an English chemist William Hyde Wollaston.

The metal was first isolated following a series of chemical reactions that involved dissolving platinum with several other acids, including hydrochloric acid and nitric acid. However, it was not until 1805 that the researchers working on discovering this precious metal declared it as a newly found element. 

The rare metal, palladium, gets its name from “Pallas” which is the third-largest asteroid in the asteroid belt and was discovered in 1802, shortly before the discovery of palladium. 

Chemically, Palladium is one of six elements in the platinum group which consists of the following:

    • Platinum 
    • Rhodium
    • Ruthenium
    • Osmium and 
    • Iridium 

These elements’ chemical structure makes them an excellent catalyst and therefore, they have wide industrial applications. But before we get into its uses, let’s look at a few facts about this rare metal. 

    • Symbol – Pd 
    • Atomic Number – 46
    • Atomic Weight – 106.4
    • Density – 12.02 g/cm3
    • State at Room Temperature – Solid
    • Melting Point – 2,831oF
    • Boiling Point – 5,360 oF
    • # of isotopes – 29
    • The metal is malleable and ductile 
    • Palladium does not react with air

Uses of Palladium 

Let’s look at some of the most common uses of palladium and the industries that use it.

Automotive 

One of the biggest industrial users of palladium in the automotive industry, where the metal is used as a catalytic converter. It works by changing most polluting compounds’ chemical composition so they become less environmentally harmful chemicals. For years, palladium was the top choice for catalysts, but given the significant increase in the price of the metal, automotive manufacturers are starting to look for less pricey alternatives. 

Precious Metals

Another common use of palladium is its use as an investment asset. Given the metal’s rarity, it is one of the highly valued investments and is considered a safe store of value. It is because of its value that the palladium coins and bars have been issued and used as an investment by investors around the world. 

Jewelry 

Palladium in White Gold Jewelry
Palladium in White Gold Jewelry Photo: Pexels

While yellow, traditional gold is still preferred for jewelry, white gold is another popular metal. Palladium is used as one of the alloys that give strength, color, and shiny texture to white gold. Its pure form is malleable and soft with a 950 fineness.

Dentistry

Palladium is also used in dental amalgams. The rare metal is combined with small amounts of silver, copper, mercury, and tin to help fight against dental corrosion. Moreover, it improves the stability and quality of dental fillings. While palladium is used in minimal quantities, use in dentistry is one of its most critical uses. 

Other Uses 

    • The use in electronic industry 
    • In the manufacturing of professional, concert-grade flutes
    • Photographic printing 
    • Fuel cells, including hydrogen purification 

What Makes Palladium More Valuable than Gold?

Investment Graph
Photo by Markus Winkler on Unsplash

Now that you already know what palladium is and what are some of its common uses, let’s look at the most important question. What makes palladium more valuable than gold?

In 2019, palladium was one of the four most expensive metals along with gold and platinum. But the trend continued long after 2019, and the precious metal is still one of the most expensive metals out there. Here are a few reasons for the increasing price trend. 

The demand for palladium, particularly from the automotive industry, continued to rise as the world became more environmentally friendly and the demand from China particularly rose as pollution is a major concern. 

Moreover, the supply side didn’t respond much to the rising demand. The metal is primarily mined in South Africa and Russia and the producers are not proactive in reacting to the increasing demand. In 2021, the supply fell short of the demand for the 10th year in a row. 

Did You Know?

    • According to the USGS, the U.S. is one of the biggest platinum group importers (which also includes palladium). 
    • Palladium has an incredible power to absorb hydrogen. This rare metal can absorb up to 900 times its volume of hydrogen. Because of this ability, palladium is widely used to purify and store highly volatile hydrogen gas. 
    • Palladium is used for photo printing that makes your photographs look long-lasting. The process uses palladium salts, which become embedded in the photo paper and give it a matte appearance and longevity. 
    • While palladium is relatively inactive, gold jewelry can cause allergic reactions in some people. If you already have a nickel allergy, you are at a higher risk of sensitivity from palladium as well. 
    • Palladium can be somewhat toxic for the human body, but the metal decreases the heart rate and blood pressure. Moreover, it can lead to kidney and liver damage as well as cause damage to the bone marrow. Compounds of palladium such as palladium chloride can be toxic when inhaled, swallowed, or absorbed through the skin. 

Latest on the Precious Metal 

The supply of palladium has been falling short for a decade now, but here is some good news about this precious metal. Researchers at Brown University and Rhode Island have found a new way to use the cheaper palladium nanoparticles, which work as a kind of catalytic converter to facilitate water filtration. 

The prototype water filtration system is currently under testing. The objective is to find out if the system can work on a larger scale at a low cost. 

Moreover, research in other areas such as hydrogen storage ability is also underway. Soon other considerations may materialize for palladium. But investing in pallidum to diverse your investment portfolio might not be a bad idea in the long run, especially during this COVID crisis. We will just have to wait and see. 

Factors Behind Undervalued Silver

Close up of Silver CoinsSilver is perhaps the most overlooked precious metal, as most people tend to focus more on gold and platinum. However, it has most of the same properties as gold, and even offers important technological and electronic applications.  

The first reported mining of silver took place in 3,000 BC in the regions where Turkey and Greece are located. Silver was first used as a currency in the form of coins in Greece around 400 BC, but it was the Spanish conquests of South America that saw a drastic shift in silver production, which lead to three countries, Mexico, Peru and Bolivia producing over 85%of the world’s supply.  

Demand for Silver

Silver is one of the most versatile metals in the world and is used in many applications. It is the second-most tensile and malleable metal after gold. A single ounce of silver can be molded into 8,000 feet of wire.

Industrial and technological usage account for over half of the demand for silver annually which is due to its versatile nature. Here are some applications which depend on silver:  

Industrial Applications

Silver is one of the best conductors of heat and electricity which makes it viable for use in many electrical applications. It is the primary element used in the production of solar panels. The metal is also heavily used in the automobile sector.

Jewelry

Few metals are better suited for jewelry than silver, which is what drives up demand in this sector. Shiny and resilient, the metal is quite easily molded into shapes, requires less upkeep and can last a long time.

Coins

Silver was once the most widely used form of currency in the shape of coins. It was used globally as an accepted medium of exchange until it was phased out gradually in the 19th Century.

Silverware

Silver has been the standard bearer for decor and cutlery since the 14th Century. Silverware lasts for generations and does not corrode.

Is Silver Undervalued

While gold netted a decent return of 13% in 2017, silver gave out a consistently negative return. Over the course of the last seven years, the price of silver has dropped significantly from $35 an ounce in 2011 to $14 an ounce in 2018.

Even if silver is not in the same category of precious metals such as gold, the demand and supply forces dictate that the price should be much higher, especially because of its high demand in industrial usage and a weak dollar. This meant that all commodities gave a decent return except silver.

Here are some possible reasons as to why the value of silver should be higher than the current market price.

Strong Demand

Silver has many different applications and some analysts suggest that price is artificially low. Each year, new innovations are discovered regarding the usage of silver because of its unique chemical properties. Applications from biotech to electronics all use silver and there is a concern that there is not enough silver left to fulfill all the demand.

Supply Deficiency

The production of silver has struggled to meet with the surging demand. In 2017 alone, the supply of silver fell short by 32.5 million ounces, while the year before, the shortage was recorded to be 17.14 million ounces.

Despite this shortfall in supply, the price further decreased for the given years which goes against the basic economic principle of demand and supply: prices rise when demand increases and supply reduces. This led market analysts to speculate that silver was undervalued, as prices remained low even as demand outpaced supply.

The Gold-Silver Ratio

The gold-silver ratio is a measurement of how many ounces of silver does it take to purchase an ounce of gold. Historically the average of this ratio has always been 12:1. This means it takes 12 ounces of silver to buy 1 ounce of gold. The current ratio is 83:1 implying that the market price of silver is massively undervalued.

Reasons to Buy Silver

Silver appears to be a great buy for investors at the moment because of it being relatively underpriced as compared to other metals; however, there isn’t a lot of capital tied up in silver compared to gold. Furthermore silver can meet small financial needs in case of an emergency as it can be easily broken down into smaller denominations. Also silver coins and bars can be sold almost anywhere in the world.

As world inventories of silver have fallen thanks to a surging demand and a falling supply, a fact has been established from data observation over the past fifty years. Since silver is a small market, small money movements have a great impact on price which implies high volatility. A great volatility means that silver can fall more than gold in bearish markets but the opposite stands true for bull markets.

With observation and a little knowledge, you can clock in at the right time to buy silver when it is at an all-time low currently and reap in the profits when prices take off. As of the writing of this article, the price of silver is $15.31.

One of the biggest banks on Wall Street, JPMorgan identified this opportunity in 2011 by buying silver in great numbers. Reports of the bank having accumulated more than 600 million ounces of physical silver at their warehouse, implies a changing trend. Silver prices appear to be at an all-time low and a bank on Wall Street accumulating a huge stash of the metal is not for nothing.  

Commodities are all priced in dollars and depreciation in USD means that the prices of all commodities are rising, except silver. With a massive hoard of silver in their warehouse, JPMorgan is likely to have predicted a spike in the price of silver much quicker than the rest of us.

Brief Introduction to Investing in Gold

Ah gold, the metal we humans have been fascinated with since the 5th millennium BC, when the metallurgy era had begun. From a scientific standpoint, this precious metal is an element just like hundreds of other naturally occurring substances. However, from the lens of history, gold has been a symbol of prosperity and wealth and it is still considered a valuable asset today, which is traded daily on the gold market. As of the writing of this article, the price of one ounce of gold is $1,317.00 and there is no doubt that this alloy will remain a precious one for centuries to come.

A Bit of Gold History

One historic example of the interest in gold unfolded was with the Thracians, an Indo-European tribe that inhabited a large part of Europe and began preserving this metal as a commodity.   

Egyptians were the first ones who started refining gold ores and used its bars in trade exchanges. In 600 BC, the Lydia Kingdom introduced gold mints as a currency. From then on, gold became a leading option to store value, worth and to make investments.

And to this day, gold is still considered a viable investment option. In this article, we will discuss the reasons why the value of gold as an investment and money has transcended many eras and civilizations.

The Status of Gold as the Oldest Currency

As mentioned earlier, no currency from modern times can predate the status of gold as money. It has been used for over 2,500 years. The second oldest currency in the world is Pound Sterling that was introduced 1,300 years after gold had established its place as a currency.

Gold is not just the oldest currency. It is also a commodity that preserves its value. From the beginning of the 20th century, all major currencies of the world depreciate in comparison to the value of precious metals.

Yes, the price of gold fluctuates like any other commodity. However, its value remains constant over a long period of time.  Waves of inflation affect the purchasing power of traditional currencies, but gold remains unaffected to such economic woes.

The Tangible Nature of Gold

Investments can either be tangible or intangible, and gold belongs to the former group. In today’s world, most of our investments are intangible. Whether it’s stocks or cryptocurrency, everything exists in an intangible form or in a cloud and thus has a volatile nature. As soon as a company declares bankruptcy, its stocks vanish into thin air.  On the other hand, the majority of tangible assets are subjected to physical depreciation. A stash of corn won’t be same after, say, six months. Similarly, conserved oil depletes when it is not properly covered.

In comparison, gold is a tangible asset that can withstand all natural wear and tear. Whether its heat or water, nothing can physically wear out a gold specimen.  Moreover, it can’t be hacked or tempered like digital assets. This is the reason why even after all technological progressions, many people still opt for gold bars and bullions as the viable choice of investment.

No High Financial Risks are Attached with Gold

Gold price graph in USD

Any investment comes with a long list of terms and conditions that also entail different risks and liabilities associated with the given plan. Then, there are intermediaries like brokers and liaisons who are also involved throughout the process and also share the profit.

By investing in gold, one can leave out all these obstacles. It is an investment in itself and requires no terms and conditions. Its value is real and hence never falls to naught. If you have gold assets, you can use it to balance the fluctuations of stocks when the market gets volatile. Rest assured as they will hold their value and can increase in value, depending on market conditions.

There is Always a Gold Rush

The quality and viability of any investment can be gauged through its liquidation value. Every tangible or intangible commodity has a liquidity value, and gold is no different. However, there is no comparison to the liquidity power of gold. If you want to liquidate gold in any part of the world, you can find many keen buyers at any given time. Such a quick transaction is not possible with any other investment plan, no matter how lucrative and sought-after it is.

Easy Storage and Upkeep

The question of storage and upkeep arises naturally with the majority of tangible investments.  For example, crop investments will need a warehouse and active surveillance. Similarly, investing in a real estate property also entail large recurrent maintenance expenses.

Gold is also a tangible asset and a precious one. So, you will have to take care of its safe storage, which can be easily arranged through safe deposit boxes or other secure facility or through the use of precious metals companies that will hold your gold for you in certificate form. Regarding the maintenance of gold, you don’t have to do a thing since it can self-preserve its shape and quality for thousands of years.

No Specialized Knowledge is Required for Gold Investing  

Every investment, no matter how simple and uncomplicated it is, requires some prior knowledge of how it works. Investing in stock options, for instance, entail some good knowledge of how stock markets operate and how one can forecast bullish and bearish trends. Likewise, real estate investments require a hectic comparative analysis of different zones and sectors.

Although it is recommended to research the history and performance of this commodity, you don’t need to be an expert in precious metals to understand its market trends. All it takes is a little homework and money (of course)  to buy gold bullion. Once you have a good understanding of this metal’s value, you can speak to an expert who will guide you from there, and there are thousands to choose form. Just Google ‘Buy Gold’ or an equivalent search term for purchasing this commodity and scores of reputable precious metals websites will show up. With the availability of so many universally certified and accredited gold dealers, you don’t have to worry about the authenticity of any given specimen.

Gold is an Active Investment

Many people think of gold investing as a defensive strategy to protect their fortune. There is no doubt that it is one of the safest forms to preserve your assets. Gold appreciates like other viable investment options. At any given point in history, gold prices were higher than the preceding time. Gold experienced an incredible 721% rise in its price in between 1976 and 1980. Yes, gold is not just a defensive financial measure. It can also turn into a lucrative investment in the long run.

Apart from enthralling with its aesthetics in ornamental items, this yellowish metallic mineral has always provided us with an assurance on the monetary front too. And it will continue to maintain its status as an everlasting investment for a long time to come.