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Precious metals are rare, naturally occurring
metal A metal (from Greek μέταλλον ''métallon'', "mine, quarry, metal") is a material that, when freshly prepared, polished, or fractured, shows a lustrous appearance, and conducts electricity and heat relatively well. Metals are typicall ...
lic
chemical element A chemical element is a species of atoms that have a given number of protons in their nuclei, including the pure substance consisting only of that species. Unlike chemical compounds, chemical elements cannot be broken down into simpler sub ...
s of high
economic value In economics, economic value is a measure of the benefit provided by a good or service to an economic agent. It is generally measured through units of currency, and the interpretation is therefore "what is the maximum amount of money a speci ...
. Chemically, the precious metals tend to be less
reactive Reactive may refer to: *Generally, capable of having a reaction (disambiguation) *An adjective abbreviation denoting a bowling ball coverstock made of reactive resin *Reactivity (chemistry) *Reactive mind *Reactive programming See also *Reactanc ...
than most elements (see
noble metal A noble metal is ordinarily regarded as a metallic chemical element that is generally resistant to corrosion and is usually found in nature in its raw form. Gold, platinum, and the other platinum group metals ( ruthenium, rhodium, palladium, o ...
). They are usually
ductile Ductility is a mechanical property commonly described as a material's amenability to drawing (e.g. into wire). In materials science, ductility is defined by the degree to which a material can sustain plastic deformation under tensile stres ...
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. Gold,
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, and palladium each have an ISO 4217 currency code. The best known precious metals are the
coinage metals The coinage metals comprise, at a minimum, those metallic chemical elements which have historically been used as components in alloys used to mint coins. The term is not perfectly defined, however, since a number of metals have been used to mak ...
, which are gold and silver. Although both have industrial uses, they are better known for their uses in
art Art is a diverse range of human activity, and resulting product, that involves creative or imaginative talent expressive of technical proficiency, beauty, emotional power, or conceptual ideas. There is no generally agreed definition of wha ...
, jewelry, and coinage. Other precious metals include the
platinum group The platinum-group metals (abbreviated as the PGMs; alternatively, the platinoids, platinides, platidises, platinum group, platinum metals, platinum family or platinum-group elements (PGEs)) are six noble, precious metallic elements clustered t ...
metals:
ruthenium Ruthenium is a chemical element with the symbol Ru and atomic number 44. It is a rare transition metal belonging to the platinum group of the periodic table. Like the other metals of the platinum group, ruthenium is inert to most other chemical ...
, rhodium, palladium, osmium, iridium, and platinum, 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 investments and a
store of value A store of value is any commodity or asset that would normally retain purchasing power into the future and is the function of the asset that can be saved, retrieved and exchanged at a later time, and be predictably useful when retrieved. The mos ...
. 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 In economics, demand is the quantity of a good that consumers are willing and able to purchase at various prices during a given time. The relationship between price and quantity demand is also called the demand curve. Demand for a specific item ...
or market value. Precious metals in bulk form are known as bullion and are traded on
commodity market A commodity market is a market that trades in the primary economic sector rather than manufactured products, such as cocoa, fruit and sugar. Hard commodities are mined, such as gold and oil. Futures contracts are the oldest way of investin ...
s. Bullion metals may be cast into
ingot An ingot is a piece of relatively pure material, usually metal, that is cast into a shape suitable for further processing. In steelmaking, it is the first step among semi-finished casting products. Ingots usually require a second procedure of sha ...
s or minted into coins. The defining attribute of bullion is that it is valued by its mass and purity rather than by a face value 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 are as ...
.


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, ductilit ...
, with the purity a local standard. The
Krugerrand The Krugerrand (; ) is a South African coin, first minted on 3 July 1967 to help market South African gold and produced by Rand Refinery and the South African Mint. The name is a compound of ''Paul Kruger'', the former President of the South A ...
is the first modern example of measuring in "pure gold": it should contain at least 12/11
ounces The ounce () is any of several different units of mass, weight or volume and is derived almost unchanged from the , an Ancient Roman unit of measurement. The avoirdupois ounce (exactly ) is avoirdupois pound; this is the United States customa ...
of at least 11/12 pure gold. Other bullion coins (for example the British Sovereign) 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 A double eagle is a gold coin of the United States with a denomination of $20. (Its gold content of 0.9675 troy oz (30.0926 grams) was worth $20 at the 1849 official price of $20.67/oz.) The coins are 34 mm x 2 mm and are made from ...
: $20).


Coinage

Many nations mint
bullion coin Bullion is non-ferrous metal that has been refined to a high standard of elemental purity. The term is ordinarily applied to bulk metal used in the production of coins and especially to precious metals such as gold and silver. It comes fro ...
s. Although nominally issued as
legal tender Legal tender is a form of money that courts of law are required to recognize as satisfactory payment for any monetary debt. Each jurisdiction determines what is legal tender, but essentially it is anything which when offered ("tendered") in ...
, 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 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 The Australian Gold Nugget is a gold bullion coin minted by the Perth Mint. The coins have been minted in denominations of oz, oz, oz, oz, 1 oz, 2 oz, 10 oz, and 1 kg of 24 carat gold. They have legal tender status in Australia and are one ...
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 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 coin Silver coins are considered the oldest mass-produced form of coinage. Silver has been used as a coinage metal since the times of the Greeks; their silver drachmas were popular trade coins. The ancient Persians used silver coins between 612–33 ...
s 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. I ...
. 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
ore Ore is natural rock or sediment that contains one or more valuable minerals, typically containing metals, that can be mined, treated and sold at a profit.Encyclopædia Britannica. "Ore". Encyclopædia Britannica Online. Retrieved 7 Apr ...
s. 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 nephew ...
'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 was cast of 100 ounces of pure aluminium. By that time, aluminium was as expensive as silver. The statue of Anteros atop the
Shaftesbury Memorial Fountain The Shaftesbury Memorial Fountain, popularly known as Eros, is a fountain surmounted by a winged statue of Anteros, located at the southeastern side of Piccadilly Circus in London, England. Moved after the Second World War from its original pos ...
(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 The Hall–Héroult process is the major industrial process for smelting aluminium. It involves dissolving aluminium oxide (alumina) (obtained most often from bauxite, aluminium's chief ore, through the Bayer process) in molten cryolite, and el ...
in 1886 caused the price of aluminium to drop substantially over a short period of time.


Rough world market price ($/kg)


See also

* Alchemy * Gemstone *
Gold as an investment Of all the precious metals, gold is the most popular as an investment. Investors generally buy gold as a way of diversifying risk, especially through the use of futures contracts and derivatives. The gold market is subject to speculation and ...
*
Hallmark A hallmark is an official mark or series of marks struck on items made of metal, mostly to certify the content of noble metals—such as platinum, gold, silver and in some nations, palladium. In a more general sense, the term '' hallmark'' can a ...
*
List of bullion dealers This list of bullion dealers includes notable companies and organizations that deal in precious metals, such as gold and silver. References {{Reflist bullion Bullion is non-ferrous metal that has been refined to a high standard of eleme ...
* List of elements facing shortage * Metal as money *
Metallurgical assay A metallurgical assay is a compositional analysis of an ore, metal, or alloy, usually performed in order to test for purity or quality. Some assay methods are suitable for raw materials; others are more appropriate for finished goods. Raw pre ...
* Palladium as an investment * Platinum as an investment * Silver as an investment * Synthesis of precious metals (precious metal transformation) * Taxation of precious metals * Troy weight


References


External links


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