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World's Most Precious Metal Rhodium Surges 30% So Far in 2020

Professor of Financial Economics and Part-time Value Investor, Transfin.
Jan 15, 2020 9:23 AM 1 min read

2020 has barely begun but the world's most precious metal has already surged more than 30% so far to its highest level since 2008.


Shine Bright Like a Rhodium: It's not gold or platinum or palladium. The world's most precious metal is rhodium. And it began the year priced at $5,500 per ounce. Two weeks in, it is trading at $7,900 levels.


Rhodium in the Rough: The main reason is optimism surrounding a US-China trade deal (Phase One of the deal is expected to be signed this week). A thaw in bitterness between the two big economies is expected to drive car and autocatalyst demand, industries where rhodium is prominently used.


Not A New Phenomenon: To be clear, the rally so far in 2020 is a continuity of one in 2019, when rhodium prices soared 151%. In fact, in the last four years, rhodium's price has risen by 12x.


A Rhodium is Forever?: Analysts expect the pace to sustain for more time as tighter emission regulations and investor interest fuel demand. But given that rhodium is a less liquid market, prices could cool off over time. Case in point: the last time such a rally happened, rhodium rose 2,195% between 2003 and 2008. But then it gave back much of that gain as the broader market sold off.


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