Deutsche Bank has launched the first ever ETF for the precious metal rhodium, to be listed on the London stock exchange. Expecting a massive inflow of capital into this obscure corner of the hard asset world, traders ran prices up 20% last week. ETF launches for platinum (PPLT), and palladium last year had a similar effect on prices.
Rhodium is one of the world's hardest metals, and is used by the auto industry as a substitute catalyst for platinum and palladium. Like the other white metals, it therefore has twin demand for both industrial and investment purposes. About $2 billion a year worth of rhodium is mined, compared to $10 billion for platinum and $30 billion for silver. At $2,350 an ounce, rhodium is the most valuable of the precious metals, compared to gold (GLD) ($1542), platinum (PPLT) ($1,812), palladium (PALL) ($769), and silver (SLV) ($36). During the hard asset squeeze in 2008, rhodium reached an incredible $10,000 an ounce.
I'll be writing more about rhodium in the near future. When hard assets come back into vogue, this is something you want to keep on your radar. It has all the ingredients for a potential sharp appreciation; a tiny global supply and potentially insatiable demand.
From the Diary of a Mad Hedge Fund Trader.