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Many people have asked us if the metals offered on our site are good investments. We cannot and will never recommend these metals as investments. That judgment will remain with the buyer. With that said, certainly the prices for metals fluctuate considerably over time. For example, rhodium was at $800 an ounce in 2003. At the end of 2005 it had surpassed $3000 per ounce, an almost four-fold increase. Palladium went from $200 an ounce to over $800, then back to $200 within a span of a few years. Gold was $800 an ounce in the early 1980's and twenty five years later it is at $500. What determines market price? Supply and demand of course. A new demand opens up (for example: platinum use in catalytic converters for cars) and the price goes up. A new source is found for the raw metal or ore, and the price goes down. Investors get excited about a certain metal and the price goes up and so on. No one can reliably predict the future price of a metal. If you could, everyone would be rich which we know can't happen.
Gold, platinum, silver and palladium are popular investment-grade precious metals and are widely traded on open markets around the world. Other precious metals such as iridium and ruthenium are traded on open markets, but with much less volume and are considered "thinly traded" compared to the ones listed above. This fact makes these metals difficult to resell when an owner wants to "cash-in" on an investment. Compounding that difficulty is the fact that these thinly-traded metals are not in easily identifiable bullion form, such as coins or stamped bars. So while these metals are easy to buy they would be difficult to resell.
Bid-ask spread: Another factor in trading metals is the market bid-ask spread. This the difference between what you, as the retail customer, pay for a metal (ask price) and what you can immediately sell it for on the open market (bid price). The difference is the spread and represents the trading organization's handling costs and profit. It is always a cost to the retail buyer for a complete buy-sell trade. The amount of the spread depends on the volume of metal being traded. For widely-traded gold, the spread can be as little as one-tenth of 1 percent of the purchase price. Platinum is a bit higher, at around 1/2 percent. Now take iridium. It is very thinly traded due to small supply and small demand. The spread for that metal can be from 5 to 7 percent or more/less. Investing in that metal would require the price to go up by that amount just to be able to break even.
Why aren't we in the bullion/investment metals business? Because that is not our specialty. It is a very fast-paced, very low-margin business which is completely different than our core business, which is offering small samples of elements from the periodic table to collectors, and larger volumes to industrial users.
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