Kitco selling Rhodium

I take a look once in awhile at Kitco’s precious metal store and notice they are now selling Rhodium.

Rhodium is a very interesting precious metal and it is by occurrence about four times less common than gold. Other metals of roughly similar concentration are Iridium, Ruthenium, and Rhenium – all a bit cheaper than Rhodium.

I don’t have any particular love for precious metals other than that they are nice to look at and feel (especially the density), but one big concern as an investor would be – are you actually getting what you paid for? Once you receive the Rhodium in the mail, how do you know you got shipped the precious metal instead of shreds of some other (cheaper) metal? Obviously you are relying on the reputation of Kitco (which is solid) but once you sign for the package in the mail and rip open the container, how do you verify Rhodium?

At least with gold there is a basic non-destructive test you can run at home to knock off all forgeries (water displacement). Unfortunately, the density of Gold is nearly identical that of Tungsten, so to detect Tungsten forgeries you have to resort to an interesting methods (e.g. determining how fast sound waves travel through the metal – sound moves through Gold about twice as slow as it does through Tungsten). Also, working with Tungsten is very difficult (the melting point of Tungsten is very, very high, much higher than gold).

If I ever bought a gold bar, the first thing I would do is the displacement test. It would also be rather fun to perform.

A large component of value for most precious metals is the psychological value that somebody else had to go through a lot of work to mine and refine a lot of ore to concentrate the metal into a nearly pure form. This is contrasted with industrial usage, where you can make a genuine argument with respect to the value of a metal.

For example, if somebody invented a way to repel gravity, but it had to rely on Rhodium, you can be sure that the price of Rhodium would skyrocket and it would quickly replace crude oil as being the most commonly quoted commodity in the news.