Why the Most Expensive Precious Metals Are Often Your Best Investment Buy

Precious Metal InvestmentRecycle Precious MetalsRecycling and Refining
Written By Barry Lenson

What makes for a good investment? As we have noted on this blog before, a good investment is one that offers a significant return on investment. If you can invest in something – a stock, a piece of gold, a painting, anything – and then sell it for three or four times what you paid for it or more, then you have made a good investment.

Yet other considerations make some investments better than others. And today, we would like to offer one of them for your consideration.

Buy the More Expensive Precious Metals

It is generally wisest to invest in the precious metals that are currently the most valuable – that are trading for the highest prices. Just to review, the most valuable precious metals are currently trading at these levels per Troy Ounce on the London Fix (as of 8/21/20):

  • Gold - $1,938.60

  • Platinum - $894.00

  • Palladium - $2,076.00

  • Rhodium - $10,200.00

And then we come to silver, still a precious metal, but one that is trading for only about $27.00.

Why It Makes Sense to Invest in More Valuable Metals

Here are two general reasons why the most expensive precious metals (rhodium, palladium, gold, and platinum), in pure form or close to it, are very smart investments:

  • In pure form, they are the most cost-effective to store – Just for comparison sake, let us note that you can store $20,000 worth of rhodium or palladium in just one safety deposit box at a bank, and still have room left over for more. If you want to store $20,000 worth of silver, in contrast, you are going to need a storage unit in a roadside self-storage unit.

  • In pure form, they are the most cost-effective to ship to Specialty Metals for testing – Yes, you are going to need to insure those valuable metals when you send them to us to be tested. But again, you can easily pack up and send a few thousand dollars’ worth of rhodium, palladium, platinum, or gold and send them to us. So generally speaking, the most valuable metals offer the greatest convenience.

But What If You Are Investing in Mixed Scrap, Not Pure Metal?

If you are an experienced investor in precious metals, chances are you have been wondering just how sound the advice is that we give just above. You know that in addition to the trading price of a precious metal, a number of other considerations impact on how good an investment it really is.

One of the biggest considerations is what kind of scrap the precious metal is found in. Let’s think for a minute about:

Catalytic converters - Platinum is valuable, as we noted above. And it is found in catalytic converters, where it can make up only a small percentage of the overall weight of the converters that you own. So even though platinum is valuable, in cat converters, every ounce is expensive to store, difficult to send to us for testing, and complicated to extract. So yes, platinum is a valuable metal, but when found in cat converters, many of its inherent advantages are hard for investors to realize. This explains why a lot of the excitement about buying cat converters has faded over the last five or six years, as it should have.

Thermocouple wire – This stuff can contain silver, platinum, and other precious metals. But as is the case with catalytic converters, those precious metals generally make up only a small percentage of overall weight. So even though your thermocouple wire could contain $200 worth of platinum, it is going to cost a lot to acquire it, move it, store it, ship it, etc.

Black dirt and mine runoff material – You’ve got the idea. Granted, you might be able to get your hands on ten tons of sediment from a runoff field near a gold mine, and that sediment will potentially contain a valuable quantity of gold. Maybe even $2,000 or $4,000 or more. But the costs of moving, storing, testing, and extracting that gold are going to mount up pretty quickly. Is that dirt a good investment. It’s a question worth considering.

So, What’s a Good Investment?

The best scrap investment, generally, is one that contains the most precious metal in the smallest package. But other considerations come into play.

Before you invest in precious metal scrap – or if you have some you would like to have tested and processed – give Specialty Metals Smelters and Refiners a call at 800-426-2344. We are here to offer you our expert advice on making more money from all your precious metal investments.

Barry Lenson
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