Just for interest I have been doing a bit of investigation into Rhodium and how it compares to the Gold and Silver markets.
While Rhodium is the rarest and most valuable precious metal on the market it has a pretty big price volatility. This year its price is up over 35%. Not bad for 2 weeks of trading. It is currently trading at $10600 (aud) an oz and it went up $1500 in one night. The main use is in the automotive industry, with some jewelry applications and a few other industrial uses.
The main take away I learned was that the market for Rhodium is not regulated and therefore its price is a natural result of supply and demand; meaning it is a truer reflection of real price discovery.
How I wish this was applicable to Gold and Silver which, as we all know, are heavily manipulated. The paper markets control prices mainly using naked shorts and this to me is nothing short of criminal. The derivative should get its value from the underlying asset and not the other way around. Therefore the derivative controls the price which means there is no true price discovery and this allows large traders to generate large profits to their own benefit - It goes up and they smash it down.!!! At this point I wish to insert an expletive but you can choose your own.
One day there will be some sort of major crisis either political or economic and a lot of the traders will get their comeuppance as demand overwhelms their ability to manipulate the price. It will happen sooner or later.
In the interim I am still bullish on Gold and Silver because of its ability to store wealth in a way that maintains true purchasing power, however I am sick and tired of the criminal manipulations which occur all the time.
Eventually we will see some true price discovery for Gold and Silver and then the price will be multiples of what we currently have.
Lucky there are no bankers or commodity traders near me at the moment because I would probably slap them really hard.
