This article…looks at physical gold, silver, platinum and copper regarding their respective versatility of use, durability, fungibility, store of value, liquidity and aesthetics [which will] yield a new perspective on precious metals (including copper). Words: 850
So says Krassen Ratchev in edited excerpts from his original article* as posted on Seeking Alpha entitled A Truly Physical Perspective On Precious Metals.
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Ratchev goes on to say in further updated and edited excerpts:
Physical Properties Comparison
Table 1 below shows the physical properties of gold, silver, platinum and copper:
|Electrical Conductivity (S/m)||4.1×107||6.30×107||9.43×106||5.96×107|
|Reactivity Series (no units)||#2||#3||#1||#5|
|Thermal Conductivity (W.m-1.K-1)||318||429||71.6||401|
|Young’s Modulus (GPa)||79||83||168||110-128|
|Hardness (Mohs scale)||2.5||2.5||4.25||3.0|
If you didn’t graduate with honors in chemistry you needn’t worry – I have described each of the physical properties below:
- Density – Platinum has the highest density of the four metals. This means that you can fit more mass of platinum in the same amount of volume than gold, silver or copper.
- Electrical Conductivity– Out of the four metals, silver possesses the greatest ability to conduct an electric current through its structure.
- Reactivity Series – This is a simple ranking of a metal’s reactivity in nature. Platinum is the least reactive, followed by gold, silver, mercury and copper. This is why gold artifacts that have been buried for thousands of years have little to no tarnish on them and this is also why that long-lost silver vase of yours will need some polishing before it looks presentable for the mantelpiece.
- Thermal Conductivity– Silver has the greatest ability to transfer heat through its structure than any of the other metals.
- Young’s Modulus– Gold has the greatest ability to be hammered and stretched into long and flat shapes before losing its structural integrity.
- Hardness – Platinum is the hardest of the four precious metals. This means that you will have more success in scratching a bar of gold with a platinum coin than the other way around.
It is now not very difficult to imagine how the physical properties of these metals have influenced their evolution over the centuries from jewelry to money to a presently ever-growing list of industrial and scientific applications but how do they stack up on a price-to-physical-property value scale?
Ratio of Prices of Each Per Unit of Physical Property
In Table 2 below I have presented the current prices (USD/oz as of 01/03/2013) of these metals and the corresponding ratios of prices-per-unit-of-physical-property from Table 1.
|01/03/2013 Price (USD/oz)||1575||28.5||1575||0.2175|
|RATIO||PRICE DIVIDED BY PHYSICAL PROPERTY IN FIGURE 1|
As can be clearly seen from Table 2, if you want to get decent bang for your electrical buck – or any other buck for that matter – copper stands out as being the best value-for-money. Of course, everyone already knows this.
Also, despite silver’s better electrical and thermal conductivity and [somewhat] similar Young’s Modulus to gold, its price ratio in these three physical properties makes it appear to be extremely cheaper than gold. As such, one may conclude that currently silver is a much better investment than gold….
Let’s turn our attention to their store-of-value potentials. Clearly a coin or bar made from platinum will be a better store of value – at current prices – than gold. Why? Simply because platinum is harder (won’t scratch), less reactive (won’t tarnish) and occupies a smaller volume (easier to store) than gold. [Nevertheless,] the market seems to think that these physical properties are deficient to something else. Perhaps it comes down to the possibility that:
- central banks simply can’t get enough platinum bullion (due to its rarity in the earth) to make it worth their while to replace their gold bullion or perhaps that
- platinum has been unable to (in its short existence) shake off gold as the true form of money….
Editor’s Note: The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.
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