A guide to investing in Rhodium

Investment

Many bullion websites that advertise buying precious metals include gold, silver, platinum, and palladium. Fewer include Rhodium, leading some to question why they should buy Rhodium online or even take the time to invest in the precious metal.

Rhodium is a corrosion-resistant metal that is often used in catalytic converters and as a material in instances where electrical contact is needed. The metal surged in price across 2020, reaching a then 10-year price peak of more than $3,300 an ounce in March 2019. As of late February 2021, the metal’s spot price sits at around $24,500 per ounce. 

Understanding Why Rhodium Is Valuable

A dense, hard metal, Rhodium is far rarer than platinum and palladium. Just 28 tons of white metal are mined each year, compared to 220 tons of platinum and more than 2,300 of gold. The metal is produced as a byproduct in nickel and platinum mines, so Rhodium’s supply is not able to be adjusted up to keep pace with global demand. Currently, there are no deposits anywhere in the world where Rhodium is the primary metal. 

The spot price of Rhodium has jumped greatly in the last couple of years, partly due to decisions by auto manufacturers to recall vehicles to replace catalytic converters. 

In early 2019, Toyota said 862,520 of its vehicles needed new converters to keep the cars in line with federal emissions standards. The announcement led to a 17% month-to-date price jump for the metal. 

The price of the precious metal surged across 2020 due to the coronavirus pandemic. Strong demand combined with major supply shortfalls from mines in South Africa has led to Rhodium’s price rising 3,000% in five years, as of early 2021. 

Speculation is the metal’s price will continue to rise in 2021 and beyond as auto manufacturers prepare for another round of tightened emissions standards in 2023, along with continued concerns about the coronavirus in South Africa that seemingly will hamper supply even further. 

How To Best Invest In Rhodium

Investors who see how much Rhodium has surged in the last few years often ask how they can purchase the valuable metal.  

Since the rhodium market is so small outside of the automotive industry, there remain relatively few ways to purchase Rhodium. The best option right now is purchasing physical rhodium bullion in the form of coins and bars.  

The Tuvaluan $100 coin is the globe’s first example of legal tender completely made out of Rhodium. The first run of minted coins was limited to only 1,000, making the coin extremely valuable from an investment and collectible standpoint. Each coin consists of 1 ounce of Rhodium. 

Investors who are having trouble finding the Tuvaluan $100 coin can opt for the Baird & Co. .999 1 oz rhodium bar or the 1oz PAMP Suisse Lady Fortuna bar. Both bullion bars are manufactured by respected companies, are encased in a protective holder, and feature a serial number so investors can enjoy peace of mind about the validity of their investment.  

Rhodium bars are an attractive way to invest in the metal as there is a small premium over the spot price. The bar’s small size and light weight make them easy to store and ship as needed, meaning a rhodium investment will not require a large amount of storage space.  

Even though physical bullion is one of the more well-known ways to purchase Rhodium, investors interested in the metal have a few other unique options to choose from. One is the DWS Rhodium ETF, which made waves last year after investors realized in April the fund delivered a 194% return over the last twelve months. 

Those interested in cryptocurrency also have the opportunity to buy Rhodium Coin, a virtual currency backed by physical bullion reserves of Rhodium, secured in a vault. Buyers can redeem their digital holdings for physical bullion at any time. 

Buying Rhodium As An Investment 

Purchasing rhodium bullion is a unique way to diversify a portfolio into precious metals.  

Rhodium is extremely valuable, rare, and only looks to keep growing in price as supply remains low and demand rises. Investors have the ability to purchase rhodium coins and bars and even purchase funds with rhodium exposure and cryptocurrencies backed by precious metal. 

Investors can rest assured the current options for buying Rhodium represent safe and secure ways to buy into the valuable metal and add the asset to their portfolio. 

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