Rare chemical elements that have high economic value. Precious metal elements are less reactive than other elements.
Precious Metals Details
The rarity and cost of precious metals make them a status symbol in many economies. Many countries use precious metals as a form of currency. The investment world uses precious metals as a form of investment. Demand and market value drive the status of precious metals.
Such metals in bulk form are known as bullion. The purity and mass are what made bullion more popular than their face value. The value of precious metals varies based on their purity. Three nines (99.9%) of purity are the most common level of purity observed in precious metals. The Canadian Gold Maple Leaf series coins are the purest mass-produced bullion coins with 99.999% purity. A 100% pure bullion is nearly impossible to produce.
Several countries use bullion coins as legal tender. The value of these coins as bullions is much higher than their face value as currency. For example, the Gold Maple Leaf coin is worth around $1500 as bullion. This value is much higher than its $50 face value. While precious metals have an alluring luster, many everyday consumers use precious metals as money, jewelry, and art.
Real-World Example of Precious Metals
Gold and Silver: Gold and Silver are synonymous with precious metals since ancient times. Currently, 85% of Gold and 60% of silver is used for jewelry, ornaments, household items, etc. Gold is corrosion-resistant and is a great static-free electricity conductor. Silver has the highest electric and thermal conductivity of all metals, making it suitable for solar panels, rapid charging stations, etc.
Platinum: The rarest precious elements belong to the Platinum group, including Platinum, Palladium, Rhodium, Iridium, Ruthenium, and Osmium. The Platinum group of elements are most commonly used in catalytic converters for vehicles. These elements convert harmful emissions from the combustion chambers into less harmful gases as they pass through the catalytic converter system.
Aluminum: During the 1800s, Aluminum was one of the most precious metals, but it has become common nowadays. Aluminum's extraction from its non-metallic ores was a painstakingly difficult task that made it quite precious in those times. In the late 1800s, Aluminum used to be more precious than Gold. During this period, Napoleon used to serve dinner to his esteemed guests on Aluminum plates. However, the advent of electric generators made Aluminum's extraction significantly more accessible, and the price of Aluminum dropped considerably over the years to follow. Now Aluminum is used to produce cans, foils, airplane parts, and window frames.
Significance of Precious Metals
Precious metals are rare commodities in nature which makes them a highly suitable asset for investors. Several countries utilize precious metals as part of their currencies. This made them strong players in the global economy, especially during times of financial crisis.
Nowadays, investors use precious metals as financial assets. Precious metals like Gold, Platinum, etc., play a key role in a hedge against inflation as having such precious metals as assets increase resilience during uncertain financial conditions.