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Metal Price Evaluations: Now and In The Future

Metal Price Evaluations: Now and In The Future

The year is 2100 and high amounts of metals have been extracted from the Earth's crust and more is needed but deep space is the only source. Cities, roads, precious farmland, parks and woodlands are built or preserved where possible high grade ores are, will we dug up to accommodate our need for metals? All the landfills have been dug up and the metals extracted from them! Will rationing and super high prices of metals be a mainstay if humans leave Earth with our resources? Will there be a supply of life giving metals on another planet? Will the value of a metal on Earth increase if someone leaves Earth with a portion of it? If these scenarios I mentioned happen, maybe now would be a good time to start collecting metals that will be very valuable in the future, especially if you are not rich now, but would like to leave a little something for your grandchildren/loved ones.

Right now metal is usually priced on supply and demand. For Gold there is a London Fix pricing, for some other metals, companies set prices based on the average price from other market competitors (LME, CME, etc..). I like that Molybdenum is super cheap right now ($1 an ounce) and I think it will be the Knight in shining armour in the near and distant future.

What if metal prices were based on how much there was available on Earth? Let us now imagine that the future is now, and all the metals have already been extracted from the Earth's crust. This means that where, how, when it was mined and how difficult it is to separate does not affect price anymore. Let's talk about all the metal that WAS in the Earth's crust. It is now extracted and recycled from old vehicles, landfills, ageing infrastructure etc.. In my opinion only metals that sustain life would be in my metal collection. If this scenario ever happens and it will if the population increases and that means more infrastructure, entertainment, transportation etc... it would be good to get a head start right now on possessing important metals.

In this upcoming list I want to talk about the ratio of metal prices that is happening right now.

Iridium is the rarest at 0.001 ppm in Earth's crust, cost is $1050/ounce. Gold is at 0.004 ppm in Earth's crust, cost is $1500/ounce. Iridium is 4 times less abundant than Gold and should cost $6000/ounce. Rhenium is about the same abundance in Earth's crust as Gold but only costs $120/ounce. These prices are approximations and my point is that metals are priced on hype and what we price them at, but they should be priced according to Earth's availability and maybe will be one day.

If you consider life giving elements (transition metals) for pricing, Molybdenum is 56000 times scarcer than Iron and only cost 65 times more. Molybdenum is 60 times scarcer than Copper and costs only 4 times more. Molybdenum is 25 times scarcer than Cobalt and costs the same. Molybdenum is 70 times scarcer than Zinc and only costs 18 times more. Molybdenum is 84 times scarcer than Nickel and only costs double the amount. Molybdenum is 950 times scarcer than Manganese and only costs 30 times more. These prices are definitely mind boggling and if you think these don't matter, you might be wrong. It's only a miracle that the most important metal (Molybdenum) is the cheapest, that is if you look at the abundance/cost ratio.

Look at the Monarchies, The Vatican, Billionaires and Central Banks they have stockpiled Gold. If you look at it in percentage terms, 99.9% of known Gold supply is already bought and when we buy 1 ounce or 100 ounces we still own a miniscule amount compared to them, they will stay rich and you will stay poor. Everyday people buy into this "crisis investment" and "hedge to inflation" scenario for hundreds of years now and it just gives Gold a stronghold. Why not accumulate a different and way more useful metal, for example: Molybdenum. As always do your own research. Due diligence people.

Carlo Biancardi (London, Ontario) May 2011