Gold, Platinum, and Silver often referred to as precious metals. We are all familiar with them and the twinkle they bring to our eye. The last 15 years or so have not been very good times for the "precious metals". They have been increasingly used for industrial purposes and in electronics. Since the Bretton Woods accord in November of 1973, that took the US dollar off of the Gold standard, gold has not been used to back our currency. Banks no longer use Gold or Silver to back their currencies, opting for interest rate items, that do not incur storage or security costs.

Silver and Gold have become mainstays of industrial electronics. Silver is used in photography and medical technology (x-rays) now more than ever. Gold’s use in electronics now ranks second in consumption and continues to rise. Platinum’s main industrial use is in the automotive industry. Catalytic converters are the main product created by the use of this rare metal.

Gold has been a form of currency for thousands of years and has now lost most of it’s banking appeal. This market still enjoys a great deal of open interest, though. Gold is still hoarded and kept as an investment vehicle despite it’s decreasing price. To give you an idea of the price fluctuation gold has experienced, prior to 1973 gold was fixed at $35 a Troy ounce, and has since been as high as $873 a Troy ounce. South Africa is the world’s largest producer of Gold followed by the United States. Japan and the US are the largest consumers of gold for industrial use. Gold futures contracts are traded on the New York Mercantile Exchange in contracts of 100 Troy ounces, or roughly 7 pounds (6.8) each.

Silver also has been known as a lesser form of currency and commerce for millennia. In recent years it has been discovered to be a venerable industrial metal, having many uses in electronics and photography. This discovery has lead to more effective ways of recycling the product for reuse. The US and Japan lead the recycling effort of Silver while Mexico and Peru lead the world in total mine production. Approximately 40% of all silver is recycled worldwide. Silver is an industrial metal primarily, with silver components being found in everything from light switches and microwave’s to batteries and bearings. Silver futures are traded at the New York Mercantile Exchange in contracts of 5000 Troy ounces or approximately 342 pounds per contract.

Platinum, once know as a nuisance in gold production, and unusable, has become an important rare metal. It has only been used for a little over 200 years and has many desirable qualities as an industrial metal. It does have some use as an investment vehicle because of its rareness. Most heavily desired by the automobile industry and electronics industry, platinum’s rarity makes it valuable. Being stockpiled by militaries worldwide and used in some coinage, has made it even more rare. To put the supply of Platinum in perspective, more than twice as much steel is poured each day in the US , than Platinum is mined in the world each year. Platinum futures trade also at the New York Mercantile Exchange in contracts of 50 Troy ounces or about 3.5 pounds.

Copper and Palladium are the other main metal futures contracts. Copper is an industrial metal, and is effected mainly by basic production and consumption concerns. Traded also on the NY Merc in contracts of 25,000 pounds, copper does not enjoy the speculative open interest of Gold or Silver. Palladium is also an industrial metal most closely related to Platinum, it is known for wild price fluctuations, high margin, and low open interest. Not a market for the light of pocket book or weak of heart, not recommended for new traders (or any small speculators really, in my opinion).