Precious metals: trade of the future – technology metals as raw material in industry for technologies. The discussion of critical raw materials – in conversation with Dr. Peter Riedi, EM Global Service AG based in the Principality of Liechtenstein.
The trends of the future not only set the reality of life, they also influence a wide variety of markets around the world. New technologies to reduce carbon dioxide emissions and digitalization are increasing the demand for raw materials such as precious metals and rare earths, and this is leading to critical discussions. Already, a change is emerging in the precious metals market, which gives much to expect as a basis for investment. It makes sense to deal in the present with the trade of precious metals such as gold and silver, as well as the rare earths.
The precious metal gold
Modern technologies can not do without rare earths (in total they include 17 elements). Economist and expert of precious metals Dr. Peter Riedi on this: „In the past gold was mostly seen as jewelry or as a pure value investment. In the meantime, gold plays an increasingly important role in industry and in the technology sector, which will continue to increase over the next 30 years. There are two reasons for this. On the one hand, there are and will always be people who can afford technical devices such as smartphones, and on the other hand, due to the higher demand from companies that produce these products with the precious metal gold or will recycle it.“
For a long time, gold was disregarded for innovative technologies because it is relatively unreactive. „This has changed due to technological advances. Numerous fields of application make use of precisely this property of gold. Without raw materials, there is no prosperity, because precious metals such as gold, silver and platinum, but also raw materials such as water, iron, zinc, crude oil and gas, form a fundamental prerequisite for our current prosperity. Almost every branch of industry is dependent on these – finite – input factors. Metals are found in automobiles, electric motors and buildings. Gold is also an important component in the promising technology of nanoparticles. These are used, among other things, to protect platinum catalysts in the automotive industry. The IT industry is one of the major consumers of gold. Silver is needed in the production of CDs or batteries, platinum is used for medical devices, LCD screens or in catalytic converter technology. And these are just a few examples,“ explains Dr. Peter Riedi.
In addition to the energy sector, other fields of application are emerging that promise a growing demand for gold in the future. For example, the electronics industry, which today requires various precious metals for chips, including gold. Due to the increasing financial resources for these products, the demand for gold is rising.
Silver and copper
Due to the energy transition and the resulting higher demand for wind turbines, copper demand will increase rapidly in the coming years. Dr. Peter Riedi comments:
„The use of silver for storing value and making jewelry has been common for centuries. Increasingly, however, its relevance for industrial manufacturing processes is growing. One reason is that silver has excellent properties when it comes to conducting heat and electricity. It has long been impossible to imagine the ever-growing electronics industry without it. Another reason: Silver has an antibacterial effect. That makes its use useful not only in medical technology, but also in other areas – for example, in water treatment and the development of new impregnation techniques.“ If in 2015 a global copper demand of 103,000 tons was proven, in 2035 a volume of 244,000 tons is expected. Also due to the energy transition and the increasing use of solar cells, experts predict that about 25,000 tons of silver will likely be needed for the construction of wind turbines by 2030. These figures come from a study by the German Federal Institute for Geosciences and Natural Resources (BGR).
Platinum and palladium
The automotive industry in particular already uses numerous precious metals in the manufacture of gasoline engines. „Platinum is significantly harder and mechanically more stable than gold, which explains its use for the production of particularly valuable jewelry, as a means of payment and for permanent financial investments.
But just as importantly, platinum offers remarkable catalytic properties and is suitable for industrial use. Examples include catalysts in automobiles, but also in fuel cells. There are also large-scale industrial processes such as the production of nitric acid,“ explains Dr. Peter Riedi. Due to stricter emission standards and the further development of technology, even more precious metals will be needed in the future, the expert from EM Global Service AG points out. Palladium or platinum are among the metals used for catalytic converters. Dr. Riedi: „Palladium belongs to the platinum group of metals and behaves very similarly to platinum.“ Palladium is usually a byproduct of nickel and copper mining. Palladium an excellent catalyst for accelerating chemical reactions and it is used in exhaust catalysts in the automotive industry.
This development is already reflected in the price of palladium, which has almost doubled in value compared to five years ago. In future engines with fuel cells, platinum will take on an important role. Even if less expensive precious metals are sought, platinum cannot be dispensed with because of its properties for the new technologies. Worldwide, a discussion has flared up about critical raw materials such as rare earths. The price of these precious metals, which are necessary as technology metals for the progress, will continue to rise, the precious metal experts agree globally.
Risk with precious metals – extraction of the sought-after raw materials – circular economy and recycling
Investments and risk belong together. Even if in the past a clear increase in value on the precious metal market was to be seen, this is not a promise for the future, that have investors before eyes.
Dr. Peter Riedi comments: „Therefore, when trading in precious metals, the investor should spread the risk so as not to incur excessive losses in the event of price fluctuations. The importance of electrical engineering makes it clear that the demand for the critical raw materials will increase. The investment in precious metals promises profit, since for the future numerous economic sectors plan a higher demand for precious metals such as gold and copper. The idea of sustainability, the conversion to a circular economy with the requirement of recycling affects the precious metals industry. The serious problem of environmental pollution is critically considered and discussed in relation to the growth of technology metals. Saving resources and rethinking consumption are possible solutions, as is the global conversion to a circular economy.“
Student & Blogger
About the author:
Eva Steinmetz is currently studying Applied Psychology (B. Sc.) at Apollon University of Applied Health Sciences. Her interests relate to sports psychology in the context of martial arts. Furthermore, she has a good understanding of economic topics, as she has already gained experience in FinTechs. These were in the areas of insurance and financial services, which has given Eva Steinmetz a realistic insight into these industries.
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The company EM Global Service AG located in the heart of Europe designs and manages commodity and precious metal concepts. The range of services of EM Global Service AG includes the acquisition, custody and security of physical precious metals for the owners, the buyers. The company with their team builds on economic stability and secure this with reliability and discretion in the asset custody in the heart of Europe. For more information, visit www.em-global-service.li