Business, Legal & Accounting Glossary
A precious metal is most often gold or silver, but some would include other noble metals such as platinum, palladium, and rhodium (and there are others, less well known).
Precious metals are those scarce metallic elements with enough economic significance to support an organized financial market. The most commonly mentioned precious metals are gold and silver. Platinum and palladium are also major precious metals. Less well-known precious metals include rhodium, iridium, ruthenium, osmium, and rhenium. Precious metals markets generally have at least a spot market. For anyone of the precious metals, if the market has enough depth, there may also be futures and options contracts. Each of the precious metals has its own unique set of applications and therefore associated market fundamentals. With the exception of silver, over 50% of the annual production of each of the precious metals comes from deposits in Russia and South Africa. Out of all the precious metals, gold is a special case, being linked closely to money at various times, such as during the gold standard.
Gold and silver have traditionally been used for decoration as in jewelry, and as money, later to back paper currency. They all have commercial uses: gold in dentistry and electronics, silver in photography, platinum, palladium, and rhodium in catalysts for processing petroleum or chemicals, and in catalytic converters for automobiles.
Some regard investments in precious metals as a hedge against inflation. These metals are highly valued and can contain large amounts in a small space. That makes it possible to conceal and/or transport considerable value. However, they are heavy. Protection from theft poses special issues.
Most precious metal investors prefer to have them stored in a depository for a fee or to own stocks of companies that make or deal in the metals. Precious metals mutual funds are now available.
Some regard precious metals as a special class of commodities. They do trade in world markets.
Gold brick
Gold bug
Gold standard
Gold certificate
Silver certificate
Troy ounce
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This glossary post was last updated: 22nd November, 2021 | 0 Views.