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Precious metals are rare, naturally occurring
metal A metal (from ancient Greek, Greek μέταλλον ''métallon'', "mine, quarry, metal") is a material that, when freshly prepared, polished, or fractured, shows a lustrous appearance, and conducts electrical resistivity and conductivity, e ...
lic
chemical element A chemical element is a species of atoms that have a given number of protons in their atomic nucleus, nuclei, including the pure Chemical substance, substance consisting only of that species. Unlike chemical compounds, chemical elements canno ...
s of high economic value. Chemically, the precious metals tend to be less reactive than most elements (see noble metal). They are usually ductile and have a high lustre. Historically, precious metals were important as
currency A currency, "in circulation", from la, currens, -entis, literally meaning "running" or "traversing" is a standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins. A more general ...
but are now regarded mainly as investment and industrial
raw materials A raw material, also known as a feedstock, unprocessed material, or primary commodity, is a basic material that is used to produce goods, finished goods, energy, or intermediate materials that are feedstock for future finished products. As feeds ...
.
Gold Gold is a chemical element with the symbol Au (from la, aurum) and atomic number 79. This makes it one of the higher atomic number elements that occur naturally. It is a bright, slightly orange-yellow, dense, soft, malleable, and ductile ...
,
silver Silver is a chemical element with the symbol Ag (from the Latin ', derived from the Proto-Indo-European ''h₂erǵ'': "shiny" or "white") and atomic number 47. A soft, white, lustrous transition metal, it exhibits the highest electrical ...
,
platinum Platinum is a chemical element with the symbol Pt and atomic number 78. It is a dense, malleable, ductile, highly unreactive, precious, silverish-white transition metal. Its name originates from Spanish , a diminutive of "silver". Pla ...
, and
palladium Palladium is a chemical element with the symbol Pd and atomic number 46. It is a rare and lustrous silvery-white metal discovered in 1803 by the English chemist William Hyde Wollaston. He named it after the asteroid Pallas, which was itself ...
each have an
ISO 4217 ISO 4217 is a standard published by the International Organization for Standardization (ISO) that defines alpha codes and numeric codes for the representation of currencies and provides information about the relationships between individual ...
currency code. The best known precious metals are the coinage metals, which are gold and silver. Although both have industrial uses, they are better known for their uses in art,
jewelry Jewellery ( UK) or jewelry ( U.S.) consists of decorative items worn for personal adornment, such as brooches, rings, necklaces, earrings, pendants, bracelets, and cufflinks. Jewellery may be attached to the body or the clothes. From a w ...
, and coinage. Other precious metals include the platinum group metals: ruthenium,
rhodium Rhodium is a chemical element with the symbol Rh and atomic number 45. It is a very rare, silvery-white, hard, corrosion-resistant transition metal. It is a noble metal and a member of the platinum group. It has only one naturally occurring i ...
,
palladium Palladium is a chemical element with the symbol Pd and atomic number 46. It is a rare and lustrous silvery-white metal discovered in 1803 by the English chemist William Hyde Wollaston. He named it after the asteroid Pallas, which was itself ...
,
osmium Osmium (from Greek grc, ὀσμή, osme, smell, label=none) is a chemical element with the symbol Os and atomic number 76. It is a hard, brittle, bluish-white transition metal in the platinum group that is found as a trace element in alloys, ...
,
iridium Iridium is a chemical element with the symbol Ir and atomic number 77. A very hard, brittle, silvery-white transition metal of the platinum group, it is considered the second-densest naturally occurring metal (after osmium) with a density o ...
, and
platinum Platinum is a chemical element with the symbol Pt and atomic number 78. It is a dense, malleable, ductile, highly unreactive, precious, silverish-white transition metal. Its name originates from Spanish , a diminutive of "silver". Pla ...
, of which platinum is the most widely traded. The demand for precious metals is driven not only by their practical use but also by their role as
investment Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In finance, the purpose of investing is ...
s and a store of value. Historically, precious metals have commanded much higher prices than common industrial metals.


Bullion

A metal is deemed to be ''precious'' if it is rare. The discovery of new sources of ore or improvements in mining or refining processes may cause the value of a precious metal to diminish. The status of a "precious" metal can also be determined by high demand or
market value Market value or OMV (Open Market Valuation) is the price at which an asset would trade in a competitive auction setting. Market value is often used interchangeably with ''open market value'', '' fair value'' or ''fair market value'', although th ...
. Precious metals in bulk form are known as bullion and are traded on commodity markets. Bullion metals may be cast into ingots or minted into
coin A coin is a small, flat (usually depending on the country or value), round piece of metal or plastic used primarily as a medium of exchange or legal tender. They are standardized in weight, and produced in large quantities at a mint in order ...
s. The defining attribute of bullion is that it is valued by its mass and purity rather than by a
face value The face value, sometimes called nominal value, is the value of a coin, bond, stamp or paper money as printed on the coin, stamp or bill itself by the issuing authority. The face value of coins, stamps, or bill is usually its legal value. Howe ...
as
money Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The primary functions which distinguish money ar ...
.


Purity and mass

The level of purity varies from issue to issue. "Three nines" (99.9%) purity is common. The purest mass-produced bullion coins are in the Canadian Gold Maple Leaf series, which go up to 99.999% purity. A 100% pure bullion is nearly impossible: as the percentage of impurities diminishes, it becomes progressively more difficult to purify the metal further. Historically, coins had a certain amount of weight of
alloy An alloy is a mixture of chemical elements of which at least one is a metal. Unlike chemical compounds with metallic bases, an alloy will retain all the properties of a metal in the resulting material, such as electrical conductivity, ductili ...
, with the purity a local standard. The Krugerrand is the first modern example of measuring in "pure gold": it should contain at least 12/11 ounces of at least 11/12 pure gold. Other bullion coins (for example the
British Sovereign The monarchy of the United Kingdom, commonly referred to as the British monarchy, is the constitutional form of government by which a hereditary sovereign reigns as the head of state of the United Kingdom, the Crown Dependencies (the Bailiwi ...
) show neither the purity nor the fine-gold weight on the coin but are recognized and consistent in their composition. Many coins historically showed a denomination in currency (example: American double eagle: $20).


Coinage

Many nations mint bullion coins. Although nominally issued as legal tender, these coins' face value as currency is far below that of their value as bullion. For instance, Canada mints a gold bullion coin (the Gold Maple Leaf) at a face value of $50 containing one troy ounce (31.1035 g) of gold—as of January 2022. The USD to CAD exchange rate averaged 1.129 in July 2009 according t
OANDA Historical Exchange Rates
Although the exact moment that the $1075 figure was determined is unknown, it may be considered a reasonable value for the time. Bullion coins' minting by national governments gives them some
numismatic Numismatics is the study or collection of currency, including coins, tokens, paper money, medals and related objects. Specialists, known as numismatists, are often characterized as students or collectors of coins, but the discipline also incl ...
value in addition to their bullion value, as well as certifying their purity. One of the largest bullion coins in the world was the 10,000-dollar Australian Gold Nugget coin minted in Australia which consists of a full kilogram of 99.9% pure gold. In 2012, the Perth Mint produced a 1-tonne coin of 99.99% pure gold with a face value of $1 million AUD, making it the largest minted coin in the world with a gold value of around $50 million AUD. China has produced coins in very limited quantities (less than 20 pieces minted) that exceed of gold. Austria has minted a coin containing 31 kg of gold (the Vienna Philharmonic Coin minted in 2004 with a face value of 100,000 euro). As a stunt to publicise the 99.999% pure one-ounce Canadian Gold Maple Leaf series, in 2007 the
Royal Canadian Mint }) is the mint of Canada and a Crown corporation, operating under the ''Royal Canadian Mint Act''. The shares of the Mint are held in trust for the Crown in right of Canada. The Mint produces all of Canada's circulation coins, and manufacture ...
made a 100 kg 99.999% gold coin, with a face value of $1 million, and now manufactures them to order, but at a substantial premium over the market value of the gold.


Economic use

Gold Gold is a chemical element with the symbol Au (from la, aurum) and atomic number 79. This makes it one of the higher atomic number elements that occur naturally. It is a bright, slightly orange-yellow, dense, soft, malleable, and ductile ...
and
silver Silver is a chemical element with the symbol Ag (from the Latin ', derived from the Proto-Indo-European ''h₂erǵ'': "shiny" or "white") and atomic number 47. A soft, white, lustrous transition metal, it exhibits the highest electrical ...
, and sometimes other precious metals, are often seen as hedges against both
inflation In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reduct ...
and economic downturn. Silver coins have become popular with collectors due to their relative affordability, and, unlike most gold and platinum issues which are valued based upon the markets, silver issues are more often valued as collectibles, far higher than their actual bullion value.


Aluminium

Initially a precious metal that became common is
aluminium Aluminium (aluminum in American and Canadian English) is a chemical element with the symbol Al and atomic number 13. Aluminium has a density lower than those of other common metals, at approximately one third that of steel. It ha ...
. While aluminium is the third most abundant element and most abundant metal in the Earth's crust, it was at first found to be exceedingly difficult to extract the metal from its various non-metallic ores. The great expense of refining the metal made the small available quantity of pure aluminium more valuable than gold. Bars of aluminium were exhibited at the Exposition Universelle of 1855, and
Napoleon III Napoleon III (Charles Louis Napoléon Bonaparte; 20 April 18089 January 1873) was the first President of France (as Louis-Napoléon Bonaparte) from 1848 to 1852 and the last monarch of France as Emperor of the French from 1852 to 1870. A neph ...
's most important guests were given aluminium cutlery, while those less worthy dined with mere silver. In 1884, the pyramidal capstone of the
Washington Monument The Washington Monument is an obelisk shaped building within the National Mall in Washington, D.C., built to commemorate George Washington, once commander-in-chief of the Continental Army (1775–1784) in the American Revolutionary War and ...
was cast of 100 ounces of pure aluminium. By that time, aluminium was as expensive as silver. The statue of
Anteros In Greek mythology, Anteros (; Ancient Greek: Ἀντέρως ''Antérōs'') was the god of requited love (literally "love returned" or "counter-love") and also the punisher of those who scorn love and the advances of others, or the avenger of ...
atop the Shaftesbury Memorial Fountain (1885–1893) in London's Piccadilly Circus is also of cast aluminium. Over time, however, the price of the metal has dropped. The dawn of commercial electric generation in 1882 and the invention of the Hall–Héroult process in 1886 caused the price of aluminium to drop substantially over a short period of time.


Rough world market price ($/kg)


See also

*
Alchemy Alchemy (from Arabic: ''al-kīmiyā''; from Ancient Greek: χυμεία, ''khumeía'') is an ancient branch of natural philosophy, a philosophical and protoscientific tradition that was historically practiced in China, India, the Muslim wo ...
*
Gemstone A gemstone (also called a fine gem, jewel, precious stone, or semiprecious stone) is a piece of mineral crystal which, in cut and polished form, is used to make jewelry or other adornments. However, certain rocks (such as lapis lazuli, opal, ...
* Gold as an investment * Hallmark * List of bullion dealers *
List of elements facing shortage Since 2011, the European Commission assesses a 3-year list of Critical Raw Materials (CRMs) for the EU economy within its Raw Materials Initiative. To date, 14 CRMs were identified in 2011, 20 in 2014, 27 in 2017 and 30 in 2020. These materials ar ...
*
Metal as money Metallism is the economic principle that the value of money derives from the purchasing power of the commodity upon which it is based. The currency in a metallist monetary system may be made from the commodity itself (commodity money) or it may ...
* Metallurgical assay * Palladium as an investment *
Platinum as an investment Platinum as an investment has a much shorter history in the financial sector than gold or silver, which were known to ancient civilizations. Experts posit that platinum is about 15–20 times scarcer than gold, on the basis of annual mine produc ...
*
Silver as an investment Silver is a chemical element with the symbol Ag (from the Latin ', derived from the Proto-Indo-European ''h₂erǵ'': "shiny" or "white") and atomic number 47. A soft, white, lustrous transition metal, it exhibits the highest electrical cond ...
*
Synthesis of precious metals The synthesis of precious metals involves the use of either nuclear reactors or particle accelerators to produce these elements. Precious metals occurring as fission products Ruthenium, rhodium Ruthenium and rhodium are precious metals produ ...
(precious metal transformation) *
Taxation of precious metals Precious metals are subject to taxation in most countries, because of their high economic value. In most countries capital gains tax applies when precious metals are sold at a profit. Some countries also apply value added tax to precious metals. In ...
*
Troy weight Troy weight is a system of units of mass that originated in 15th-century England, and is primarily used in the precious metals industry. The troy weight units are the grain, the pennyweight (24 grains), the troy ounce (20 pennyweights), and ...


References


External links


Precious Metals Fraud
US Commodity Futures Trading Commission Precious Metals Fraud Advisory {{DEFAULTSORT:Precious Metal