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 yields a new perspective and appreciation of each.
The above introductory comments are edited excerpts from an article* by Krassen Ratchev as posted on SeekingAlpha.com under the title A Truly Physical Perspective On Precious Metals.
Ratchev goes on to say in further edited (and updated) 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 which means that you can fit more mass of platinum in the same amount of volume than gold, silver or copper.
- Electrical Conductivity–
- Silver possesses the greatest ability to conduct an electric current through its structure.
- Reactivity Series –
- 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 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.
How do the four metals 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 11/13/2014) of these metals and the corresponding ratios of prices-per-unit-of-physical-property from Table 1.
|11/13/2014 Price (USD/oz)||1162||15.70||1202||0.189|
|RATIO||PRICE DIVIDED BY PHYSICAL PROPERTY IN FIGURE 1|
* [Editor’s note: I do not have the mathematical capability to generate this number. The number was supplied by a reader and I am not able to verify it. If you can do so or think the numbers should be different please supply them please do so in the Comments section at the very bottom of the page. Thank you.]
As can be clearly seen from Table 2, if you want to get decent bang for your electrical buck…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 the physical properties of platinum are deficient to gold perhaps because:
- 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.
*http://seekingalpha.com/article/548251-a-truly-physical-perspective-on-precious-metals (© 2014 Seeking Alpha )
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