Tuesday, May 31, 2011

Gold Silver Platinum Palladium

This article is not meant to be a serious discussion of the precious metals (PMs).  I am laying down some markers for upcoming articles.  Today I provide the very basics on the PMs and mention some ideas I have.

Gold (Au)

Probably every one of you know that I am a gold fan.  Some 9% of my net liquid wealth is in physical gold.  Gold has for four thousand years been the most important way that humanity has kept much of their wealth.

"Gold is money, nothing else."  J. P. Morgan

Gold has some industrial use, but very little is consumed by industry.  It is held mainly by the central banks and the wealthy, but it is becoming more popular in some of the "BRIC" countries and in the Middle East.  It is my opinion (not just mine!) that the price of gold will only go up vs. prices of most other things.  Yes, in US$ terms the price will fluctuate.  But, the trend is clear.

Silver (Ag)

The "Poor Man's Gold".  Silver has also been used as money for thousands of years.  Apparently, way back in the past silver was often priced very near to gold.

I am not an expert on silver.  Because of that, I will probably invite two of my ZH virtual friends who are experts on silver to write a Guest Post on this PM.  I hope one or the other (or both!) accept...

Silver has MANY industrial uses, so the "fundamentals" of silver are very different than those of gold.  Silver also offers a very high price volatility.

Platinum (Pt)

Platinum  is my second favorite of the PMs.  It crossed $1800 / toz just today.  Yay!  Platinum is a little hard to find, particularly in American Platinum Eagles.  Platinum is about the third heaviest metal of them all, heavier than gold.

Platinum has many industrial uses because it is a catalyst, it promotes certain chemical reactions (like in oil refining and petrochemical production).  Catalytic converters use some platinum, and apparently platinum is the only acceptable catalyst for use in DIESEL ENGINE catalytic converters.

Palladium (Pd)

Palladium is chemically somewhat similar to Pt.  It is in the "Platinum Metals Group" as some chemists call it.  This PM is lighter than the very heavy Pt.  Palladium as an investment metal is even harder to find than Pt.  The only coin / bullion dealer I know who has any has it, but only in 100 oz Russian bars.  Palladium is also used as a catalyst, but has more limited as such.  A small jewelry demand (China).


I want to publish most of the below articles in the days and weeks to come:

-- an article on silver (again, I would like to have an expert write this one as a Guest Post)
-- the gold to silver ratio, which can be found at the home pages of kitco.com and 24hgold.com
-- physical ownership, "It ain't in your hands, you don't own it." vs. paper gold
-- more on platinum and palladium, I will have to research these for awhile though
-- discussion of how much "paper gold" is OUTSIDE of the USA, this might weigh on FOFOA's position

and of course:

-- gold vs. silver!

Ideas for articles on the PMs from you are welcome, either by Comment or by email.

Thanks again for stopping by!


  1. Speaking of silver, here's a really great article by Peter Degraaf. The outlook looks incredibly bullish going forward.


    Best of luck with the new blog Robert,

    Bay of Pigs

  2. OK, Bay of Pigs, just read it, thank you! It was very good.

    And yet I still do not feel qualified to really adequately discuss silver. That is why I am hoping one of my two ZH silver experts (they are both bulls on silver) will step to the plate. I need to read "The Case for Silver" discussed at a moderately challenging level, something I cannot do. But, I do NOT want PhD dissertations like FOFOA's!

    If YOU are an expert on silver and ready to do a Guest Post on it, please let me know.

    Thanks again for that interesting article. I also own silver just in case one or more of those "fundamentals" makes silver go way up. That is OK with me, but, I am still weighted to gold.

  3. I keep hearing sources in the silver community such as David Morgan who continue to say that there is NOT a shortage in supply.

    Yet even with the pullback most who got on-board the silver wagon were still in the money.

    Looking forward to reading some PM posts

  4. I would like to make a correction. You mention that "BRIC"s are getting into this. I do not know about BRC, but in I, where I am from, people have been accumulating gold (from poor peasants all the way to kings) for well over 3000 years now. In India, accumulating gold is a way of life. The general belief, you cannot go wrong with accumulating gold. In fact, people start accumulating gold for their kids right from the time they are born. Usually gold in the family is passed on to the girls as a means of insurance against the vagaries of life (and men in particular). In times of need, gold is sold off and life goes on. When my parents were building a house, mom's gold got sold off, house got built off, and the son (me) slowly replenished the gold again to previous levels and more. We Indians have deep seated mistrust of authority. Though we have never worried about confiscation, I see the unfolding tragedy when Indian government is inviting western "banks" to set up shop in India. I hope better sense prevails.

  5. I like your post & I will always be coming frequently to read more of your post. Thank you very much for your post once more.
    extraction of platinum from catalytic converters


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