Rhodium is down, way down. Good time to invest?

[sirellyn]

I know all the commodities have been pushed down. I'm not aware of the reasons circulating what Rhodium went up in the first place or why people are saying it is going down now. Anyone?

http://www.kitco.com/charts/rhodium.html

 

[Dr.3D]

Just how does one take physical possession of an ounce of Rhodium?
So far I have never seen a bar or round made out of it.

 

[theoakman]

I wouldn't right now. Rhodium is very rare but the price was based on the current global economy and power outages in South Africa (that's where most of the Rhodium comes from). There was a shortage of supply. With the recent global pullback, the world isn't going to need as much Rhodium. They will when the global economy decides to take off again. I doubt it's in the next week or month. You may see Rhodium at 1000 an oz. before the plunge is over.

 

[Johnnybags]

Matters not what the commodity is

the leverage is being unwound, all the toppy hedge funds loaded up on anything that takes work to produce and now they are all ready for a big fat margin call. Commodites will soar longer term but the flush of the toilet with those leveraged funds will happen first. Wait for the unraveling of some big players and then load up on anything. Until then, demand destruction and unwinding of positions will continue.
Also, with all the losses for traders this year, they will offset some by selling anything with a gain for tax purposes. Virtually all commodites fit the bill. Maybe towards end of October its time to revisit, by then oil will be sub 100.00 and most commodities will lose another 20 to 30 percent, IMHO.

 

[noxagol]

What is rhodium used for?

 

[dealerjim]

What is rhodium used for?

I know it's used for plating diamond settings in jewelry. Not sure of any other purposes for it.

 

[theoakman]

it's used in catalytic converters. It's a very strong catalyst for industrial oxidation processes. We've yet to even come close to replacing it.

 

[New York For Paul]

Somebody should check to see if the government stockpiles the mineral.

There are some minerals and stockpiles that the US government sold off during the Clinton years that the government is now trying to restockpile.

These dealers make good money coming and going.

 

[theoakman]

Somebody should check to see if the government stockpiles the mineral.

There are some minerals and stockpiles that the US government sold off during the Clinton years that the government is now trying to restockpile.

These dealers make good money coming and going.

doubtful. Rhodium wasn't that expensive during the Clinton years. Rhodium's big jump was really based on South Africa's inability to mine enough of it for the early 2008 market. Rhodium going to 10k was a short term thing. The global recession that seems to be occuring has severly reduced the demand for rhodium, or the future demand. No one really knows how much Rhodium we'll need and what price it should be a year from now. There are too many variables. Furthermore, the weather can play an important role in the mining of Rhodium. Since most of it comes from 1 place, the supply can be affected bigtime by stupid crap. Even a strike by the miners can cause big ripples in the market. Rhodium is way too speculative for someone looking to protect their wealth. Sure, you could get rich in that type of market. You could also lose your shirt.

 

[New York For Paul]

Al Gore assisted in selling off Elk Hills Oil Reserve.

http://www.thirdworldtraveler.com/New_Global_Economy/FireSaleEarth.html

Now the government is trying to get more oil reserves again.

 

[Brian Defferding]

If, hypothetically speaking, one were to actually get their hands on an ounce of rhodium, where would one sell it? Anyone know the process?

 

[Mahkato]

I've read that the spread between the buy and sell price you'll get from most dealers is really wide, so the market has to go way up from where you bought it just to break even.

 

[theoakman]

If, hypothetically speaking, one were to actually get their hands on an ounce of rhodium, where would one sell it? Anyone know the process?

I wouldn't know. Rhodium is just like Platinum. Both are mined primarily in South Africa. Both are used in Catalysis. It's a lot easier to just get involved with Platinum. They actually have platinum bullion coins.

 

[swissaustrian]

Rhodium is currently cheaper than gold. I´ve bought a few ounces. Maybe i´ll have to wait a few years, but the next shortage will surely come.

 

[Gaddafi Duck]

Rhodium is currently cheaper than gold. I´ve bought a few ounces. Maybe i´ll have to wait a few years, but the next shortage will surely come.

"Rhodium is currently cheaper than gold"

Rookie mistake...welcome to the world of investing. A $100 stock could be "cheap", just as a $1 stock can be "expensive". The mistake you're making is looking at price alone--and first might I add. Price should always be the last thing one looks at before investing..


Heh... if by "cheaper" you mean it costs less to buy an ounce of rhodium than an ounce of gold, that'd be like saying Bank of America stock is "cheaper" than Wal-Mart stock. Totally apples-to-oranges, dude...it's all about fundamentals. You can't compare an ounce of rhodium vis-a-vis an ounce of gold, just as you can't compare a bushel of corn to a bushel of soybeans by price alone. Although soybeans are twice as "expensive" as a bushel of corn is, that, quite frankly, means jack shit. What matters is the demand and supply of what's in question.

What's most irritating is how you went about presenting your case. You told everyone what you did and gave a brief explanation as to why and are sitting smugly behind your decision. I honestly don't care, but it's annoying more than anything that one feels they can get away with indirectly offering investment advice in passing when they are completely off the mark. If rhodium even were to go to $10,000 tomorrow, your analysis wouldn't be validated. 50/50 shot you make money off of what you did..you're not a genius by any means for flipping a coin and getting the right outcome, but the suggestion that gold is more expensive than rhodium on the basis of price alone is quite a novice observation..

But hey, it's your money.

 

[eric_cartman]

you can buy rhodium powder in vials (i think from kitco). i don't think it can take a solid form like the other precious metals.

 

[Steven Douglas]

If I was going to buy anything "off the board" it wouldn't be rhodium. I would be looking at something that might not be available later at any price. That could be rare earth minerals - required for ALL high technology needs, and China has a virtual monopoly on the world's supply of rare earth metals, which are mined almost exclusively in China, something on the order of 95%+ -- and they need it more and more for themselves.

Not to mention China can be a loose cannon, and is not beyond using it as political leverage when angered.

 

[youngbuck]

If I was going to buy anything "off the board" it wouldn't be rhodium. I would be looking at something that might not be available later at any price. That could be rare earth minerals - required for ALL high technology needs, and China has a virtual monopoly on the world's supply of rare earth metals, which are mined almost exclusively in China, something on the order of 95%+ -- and they need it more and more for themselves.

Not to mention China can be a loose cannon, and is not beyond using it as political leverage when angered.

That's all true, but I recently read that there are some serious rare earth metals tucked away in Afghanistan, and we certainly have our foot in the door there. Perhaps it was taken into the empire's consideration before invading (along with opium and other commodities).

 

[swissaustrian]

"Rhodium is currently cheaper than gold"

Rookie mistake...welcome to the world of investing. A $100 stock could be "cheap", just as a $1 stock can be "expensive". The mistake you're making is looking at price alone--and first might I add. Price should always be the last thing one looks at before investing..


Heh... if by "cheaper" you mean it costs less to buy an ounce of rhodium than an ounce of gold, that'd be like saying Bank of America stock is "cheaper" than Wal-Mart stock. Totally apples-to-oranges, dude...it's all about fundamentals. You can't compare an ounce of rhodium vis-a-vis an ounce of gold, just as you can't compare a bushel of corn to a bushel of soybeans by price alone. Although soybeans are twice as "expensive" as a bushel of corn is, that, quite frankly, means jack shit. What matters is the demand and supply of what's in question.

What's most irritating is how you went about presenting your case. You told everyone what you did and gave a brief explanation as to why and are sitting smugly behind your decision. I honestly don't care, but it's annoying more than anything that one feels they can get away with indirectly offering investment advice in passing when they are completely off the mark. If rhodium even were to go to $10,000 tomorrow, your analysis wouldn't be validated. 50/50 shot you make money off of what you did..you're not a genius by any means for flipping a coin and getting the right outcome, but the suggestion that gold is more expensive than rhodium on the basis of price alone is quite a novice observation..

But hey, it's your money.

The touch of arrogance in your statement is totally misplaced. But this seems to be your way of conversation as I have seen in your previous posts.

Surely didn´t I just buy based on prices. Historically, though, rhodium has rarely been lower priced than gold. In fact, it had a long term correlation to gold prices which was not 1:1, but clearly visable. Especially during gold and silver bull markets (1970s, 2000s), it more or less followed the direction of the bigger PM markets. See here

But here are some fundamentals I didn´t mention. From my "rookie" (i just leave it to the quotation marks ) persepective:

- UBS is launching physically backed rhodium certificates next year, said to be 1 t (not confirmed). Global annual production is just 25 tonnes, so this market is ultra tight. The spike in 2008 was caused by RBS launching a certificate plus strikes in South African platinum mines.
- Once these miners experience strikes again - a question of when not if - watch rhodium go to the moon.
- The car industry is the primary user of rhodium (mainly catalysts). Maybe they´ll have two or three tough years tough years with low demand. But car purchasing in the BRICs is exploding. This is a long term trend.

Finally: I put less than 0.4% of my money in. Just to put things in perspective...

 

[swissaustrian]

you can buy rhodium powder in vials (i think from kitco). i don't think it can take a solid form like the other precious metals.

It can, but it´s difficult to mint: http://www.rhodiumcoin.com/