Rhodium as an Investment

Rhodium is an extremely rare precious metal that has surged in price during recent years. This significant price swing is largely due to increasing demand for this metal for producing automotive parts, as well as market instability, which commonly leads to an elevated interest in safe-haven assets.

How is Rhodium Used?

The two primary ways that Rhodium is used are:

• 1. Automotive Industry
  With a higher level of scarcity than other precious metals like gold and silver, Rhodium is primarily used by the automotive industry to make catalytic converters that reduce carbon emissions.
• 2. Investing in Rhodium
  As an investment, people can buy paper Rhodium online in the form of ETFs, although the market for Rhodium futures is non-existent. Investors can also buy physical Rhodium in the form of bullion bars and non-legal-tender coins. In this way, the investor takes physical ownership of the asset, unlike investing in ETFs (and without the added brokerage fees). Coins made from Rhodium are not as common as with Platinum, Silver, and Gold due to Rhodium’s hardness, which makes it a highly brittle and difficult metal to engrave.

With economic uncertainties and global lockdowns, safe-haven assets like Rhodium are becoming more popular, as they offer a way to store wealth that is outside of traditional currencies and assets.

How Do You Invest in Rhodium?

It takes a savvy investor to buy Rhodium as an investment. That’s because when compared to gold or silver, Rhodium does not have anywhere near the liquidity and may be more difficult to cash in. Additionally, due to the fact the most of the mined Rhodium comes from one location in South Africa, this asset may be affected by geopolitical events, adding to its volatility rating.

During 2024, Rhodium has surged by over 30%, signaling that more investors are buying this precious metal to help hedge against the economic downturn. As more buy into it, liquidity should improve over the long term. Over the short term, prices could fluctuate dramatically. But some investors buy Rhodium for its long term potential due to the ever-increasing need for low emissions vehicles alongside a looming recession.

How to Buy Physical Rhodium

More valuable than all other precious metals (including gold), 1 oz of Rhodium is currently priced around $13,000. Physical Rhodium comes in two forms:

• Bullion bars are the least expensive way to buy Rhodium online. These investment grade 1 oz. bars are easy to ship, store, and trade.
• Rhodium coins are more of a commemorative nature, as Rhodium is a hard metal to mold. They do exist and are produced by private companies that back their rareness and quality. Rhodium coins are non-legal-tender as no national mint is producing them at this time.

As rare as Rhodium is to many investors, it’s growing popularity of late demonstrates a trend where investors are seeking alternative assets to diversify and protect their wealth during economic uncertainty. Gold and silver have long been go-to safe-haven assets with their long term usage in practical forms and as money. Rhodium is the new kid on the block when it comes to investing in precious metals and deserves some research if you are looking to hedge your traditional investments.