Written by Eric O’Brien, Junior Writer

Rhodium may not be the first name that springs to mind. This obscure metal, often overshadowed by its more famous peers like gold and silver, holds all of its own allure. If you consider adding rhodium to your investment portfolio, this guide provides crucial insights into this lucrative market.

Rhodium, a rare, silver-white metallic element, is part of the platinum group metals (PGMs), which include platinum, palladium, ruthenium, iridium, and osmium. It is highly reflective and resistant to corrosion, making it a unique and valuable asset.

Being estimated to be about 100 times rarer than gold, rhodium’s scarcity contributes to its precious metal status. It is mainly mined as a byproduct of platinum and nickel mining, with South Africa being the primary source of the world’s supply.

Investing in rhodium differs from investing in more common precious metals. While you cannot buy rhodium bullion coins like gold or silver, several options are available to investors. Rhodium can be purchased as bars or ingots from a limited number of precious metals dealers, often coated in a layer of gold or silver to protect its surface. Another way to invest in rhodium is through Exchange Traded Funds (ETFs) that focus on the metal.

Rhodium’s value lies in both its scarcity and its unique properties. Its exceptional resistance to corrosion and ability to withstand high temperatures make it indispensable in various industrial applications. Most notably, rhodium is in high demand in the automotive industry for catalytic converters, used to reduce harmful emissions. With the growing emphasis on reducing carbon emissions and increasing global car production, the demand for rhodium is expected to rise, further increasing its value.

Further applications of rhodium include its use as a catalyst in the chemical industry for producing nitric acid, acetic acid, and hydrogenation reactions. In the glassmaking industry, rhodium is utilized to produce fiberglass and LCD screens. Additionally, rhodium is commonly used in jewelry to plate white gold and silver, enhancing durability and shine.

Rhodium was discovered in 1803 by English chemist William Hyde Wollaston. Its name, derived from the Greek word “rhodon,” meaning rose, pays homage to the rose-red color of its salts. Considered a precious metal due to its rarity and high melting point, rhodium does not have a standard hallmark like gold, silver, and platinum, which is due to its more recent discovery and application.

Rhodium is typically more expensive than gold due to its limited supply and high demand in various industries. However, it is important to note that rhodium plating on jewelry, while enhancing its look and durability, may not always be the best choice. Rhodium plating can wear off over time, especially on items subject to regular contact and wear, such as rings and bracelets. Additionally, re-plating can be expensive due to rhodium’s high cost, and some individuals may have allergic reactions to rhodium plating.

Rhodium’s unique properties and high industry demand make it an attractive investment option. Its scarcity and the potential for substantial returns have drawn many to this shimmering metal. However, it is important to tread cautiously and approach investing in rhodium with a well-devised strategy, considering its volatile market nature.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The gold market is highly volatile, and readers should conduct thorough research before making any investment decisions.