FreshBooks banner ad

3 Important Facts about Precious Metal Prices

Gold prices were settled… before the 1970s

Up until 1971 the US would allow any foreign central bank to trade in their US dollars for gold. The precious metal price was set at $35 an ounce, and really did mean that the dollar was ‘as good as gold’. However, on August 15 of that year President Nixon announced the ‘gold window’ was to be closed.

This was down to a variety of factors, but the fact that France and Switzerland alone traded in more than 240 million US dollars for gold was certainly one factor. By revoking a promise to exchange dollars for gold the US effectively devalued its currency. The impact this had on gold prices is plain to see. Before the gold window closed the price usually didn’t change much from year to year; after 1971 however fluctuations in its price was much more common. Just three years after the gold window had closed the price of an ounce of gold had shot up to $183.77.

The automobile industry is driving up the price of rhodium

Rhodium and palladium are pretty important when it comes to the manufacturing of catalytic converters; a car component that reduces the toxicity of its emissions. Since legislation sets limits about what exhaust fumes are acceptable catalytic converters are a vital part of the vast majority of cars demand for these materials is always higher.

Rhodium is one of the rarest metals in the world – it’s 100 times rarer than gold. In fact, around only 25 tonnes is mined annually. No wonder then that an ounce of rhodium sells for $2,725. So if you’re looking to make a precious metal investment, don’t fancy buying gold, and have deep pockets then rhodium could be just what you’re after.

This is because the price of rhodium tumbled drastically from over $10,000 an ounce to under $1,000 an ounce during the sharp automotive industry decline during the global financial crisis. With recovery on the way up investing in rhodium could be a good idea. Or it could just be very risky.

This year’s Olympic gold medals could be the most valuable ever?

It’s estimated that a gold medal from the London 2012 Olympics could be worth about $95 more than the ones given at the Vancouver Winter Games and $139 more than those given at Beijing.

Of course, a gold medal isn’t made completely out of gold – such a medal would cost thousands of dollars. In fact, a gold medal is 92.5% silver. Only 1.34% of the medal is made from gold and the rest is made up of copper. Remarkably, because the silver content is so high, its value exceeds that of the gold that plates it.

Even though a gold medal is worth about $640, the athletes that win them can look forward to earning even more in endorsements and sponsorship deals. At the same time, even if these athletes had all the money in the world they couldn’t buy gold – well, not a gold medal at least.

About author

SMB Authors
SMB Authors 1044 posts

This article is one of the excellent contributions from small business owners, decision makers and professionals.

Funding Note

You might also like

News

The Tipping Point: eBay Got Tipped

I love The Tipping Point, written by Malcom Gladwell. Consider this: “The best way to understand the dramatic transformation of unknown books into bestsellers, or the rise of teenage smoking,

News

Buying a Franchise – If You Think Owning a Franchise Unit is Easy, Think Again!

I owned several local franchise units. To tell you the truth, the first time I buy a franchise unit is my effort to cut my way into entrepreneurship. I thought

Social Media

Is This the end of Social Media?

Looking into the development in social media lately, I see a tendency of over use of social media. In my opinion, social media today are heavily abused, either for personal