Metals are essential to our world
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Commodities improve the return profile of your portfolio
Commodities have little to no correlation, and sometimes even an inverse relationship, with assets such as stocks and bonds. Consequently, a downturn in the stock market doesn’t affect commodities, and they may even appreciate in value during such times. Therefore, incorporating commodities into an investment portfolio diversifies risk and stabilizes performance over the long term.
Historically, commodities have served as an effective hedge against inflation
Central banks and governments constantly increase the money supply (monetary inflation), which leads to depreciating currencies and increased prices. When prices rise, the value of commodities typically rises as well, which creates a good investment environment for commodity investors. Commodities protect your purchasing power and generate good returns. This is particularly true for precious metals like gold and silver, which have been proven stores of value for more than 5000 years.
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Global trends in favour of certain commodities
As the global economy expands, the demand for energy and metals rise. We are seeing an increased focus on electrifying our society and developing more high-tech and green-tech products, all of which requires a number of different metals. A few examples are batteries, solar panels, microchips, and wind turbines, which cannot be created without metals like copper, lithium, silver, and rare earths, among others. The rising demand for these commodities, coupled with a dwindling supply, will lead to significant higher metal prices. This scenario presents opportunities for substantial returns for investors in the companies that extract these commodities.
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AuAg's investment solutions are essential building blocks in any portfolio. They aim to deliver positive long-term returns with a low correlation to traditional investment strategies.
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It's the Elements
The Periodic Table of Chemical Elements is one of the most significant achievements in science, capturing the essence of chemistry and physics, medicine, earth sciences, and biology.
1869 is considered the year when Dmitri Mendeleev discovered the Periodic System. 2019 was the 150th anniversary of the Periodic Table of Chemical Elements and has been proclaimed the “International Year of the Periodic Table of Chemical Elements (IYPT2019)” by the United Nations General Assembly and UNESCO.
See highlighted elements to learn more!
Lithium is a soft silvery-white alkali metal, that have several important industrial uses. Today, most lithium is used to make lithium-ion batteries for electric cars and mobile devices.
Copper is used in building construction, power generation and transmission, electronic product manufacturing, and the production of industrial machinery and transportation vehicles.
Copper plays an important role in renewable energy systems such as solar and wind power.
Silver is essential in the production of both solar panels and electric vehicles (EV´s). Silver's conductivity and corrosion resistance make it necessary for conductors and electrodes; nearly every electrical connection in an EV uses silver.
In addition, silver will play a crucial part as 5G cellular networks are expanded. Semiconductor integrated circuits/chips, both within smartphones and vehicles, are used to process the frequencies 5G requires, and require silver to work.
By far the most important industrial use for gold is in fabrication of corrosion-free electrical connectors in computers and other electrical devices such as mobile phones, television sets and GPS devices.
The world’s platinum demand varies widely across many sectors. Most notably, platinum metal is used in autocatalysts and jewelry, as well as for medical and industrial purposes.
Platinum is also being used to develop new green hydrogen-powered technology. This technology plays a vital role in low carbon technologies that will enable the path to net zero targets globally.
Palladium forms a crucial part of the catalytic converters that are affixed to all modern vehicles. Catalytic converters are responsible for transforming over 90 percent of all harmful gases emitted by engines into less harmful substances.
Palladium is also an essential part of hydrogen fuel cells, an emerging technology that can completely replace all fossil fuel-based vehicles and even usurp electric vehicles in terms of environmental sustainability.
Rhodium’s primary use is in catalytic converters of automobiles, where it reduces the amount of nitrogen oxides (NOx) exhaust gases emitted into the atmosphere.
Magnesium improves the mechanical, fabrication and welding characteristics of aluminium when used as an alloying agent. These alloys are useful in aeroplane and car construction.
Magnesium is used in products that benefit from being lightweight, such as car seats, luggage, laptops, cameras and power tools.
Aluminium is an essential material for the energy transition as it forms an essential element in electrical infrastructure, solar panels, and wind turbines.
Nickel is a key component in lithium-ion batteries, used in electric vehicles. It packs more energy into batteries and allows producers to reduce use of cobalt, which is more expensive and has a less transparent supply chain.
The most important use for neodymium is in an alloy with iron and boron to make very strong permanent magnets.
Neodymium magnets are the obvious choice in wind turbine manufacturing because of their strength and small size, which reduces the weight of the turbine significantly.
Praseodymium is a soft, silvery, malleable and ductile metal, valued for its magnetic, electrical, chemical, and optical properties.
Due to its role in permanent magnets used for wind turbines, it has been argued that praseodymium will be one of the main objects of geopolitical competition in a world running on renewable energy
Dysprosium is used, in conjunction with vanadium and other elements, in making laser materials and commercial lighting. It is also used in neutron-absorbing control rods in nuclear reactors
Due to its role in permanent magnets used for wind turbines, it has been argued that dysprosium will be one of the main objects of geopolitical competition in a world running on renewable energy.
Iron is a fundamental component of modern infrastructure, widely used in the construction of buildings, bridges, and railways due to its robustness and cost-effectiveness.
It is renowned for its magnetic properties, making it essential in the production of motors and generators. Alloyed with various elements like carbon, nickel, and chromium, iron becomes steel, which boasts enhanced strength and resistance to wear and corrosion. This makes steel indispensable in heavy industry and automotive manufacturing, contributing significantly to modern engineering advancements.
Zinc is extensively used in the metal industry to galvanize steel and iron, providing a protective layer that prevents oxidation and corrosion, significantly extending the life of these metals. This process involves coating the base metal with a thin layer of zinc, which sacrificially corrodes instead of the underlying metal.
In addition to its industrial applications, zinc plays a critical role in human health as an essential trace element, important for immune function, wound healing, and DNA synthesis. It is also involved in the function of over 300 enzymes that facilitate various biochemical reactions in the body.
Lead, with the atomic number 82, is renowned for its high density and excellent ability to absorb radiation, making it a preferred material for shielding in medical imaging rooms and nuclear facilities.
Although it offers significant protection against radiation, lead is toxic and poses serious health risks, necessitating strict regulations around its use and disposal to protect human health and the environment.
Tin is a soft, pliable metal predominantly used in the production of bronze and as a component in various soldering materials. Its low melting point and malleability make it excellent for applications requiring metal joining or casting.
Tin is also used in the coating of other metals to prevent corrosion, playing a vital role in preserving the integrity and longevity of metal products.
Cobalt is vital in the manufacture of high-strength superalloys used in jet engines and gas turbines due to its ability to retain strength at high temperatures.
It is also key in lithium-ion batteries, enhancing energy density and battery life. Additionally, cobalt is used in the production of blue pigments for glass and ceramics, adding aesthetic value to these materials.
Uranium is a dense metal primarily known for its role in nuclear energy production as it can sustain a nuclear chain reaction. It is also used in the production of nuclear weapons.
Uranium's radioactive properties require careful handling and strict regulations to ensure safety and prevent environmental contamination.
Titanium is prized for its strength-to-weight ratio, corrosion resistance, and biocompatibility, making it ideal for aerospace, medical implants, and marine applications.
Its ability to withstand extreme environments without corroding is why it is used in jet engines, spacecraft, and ocean-going vessels.
Neodymium is a key component in the manufacture of powerful permanent magnets used in wind turbines, hard disk drives, and electric vehicle motors.
Its strong magnetic properties enhance the efficiency of these devices. Neodymium is also used in the production of special glass and lasers, contributing to various technological advances.
Tellurium is a metalloid known for its rarity and is mainly used in the semiconductor industry for making thermoelectric devices and solar cells.
Its compounds are also used as additives in steel to improve machinability. Tellurium's unique properties make it critical for the advancement of renewable energy technologies.
Scandium is a rare earth metal that is used to strengthen aluminum alloys used in aerospace and athletic equipment.
It enhances the properties of aluminum, making the alloy lighter, stronger, and more resistant to corrosion. Scandium is also used in the production of high-intensity lights and in some types of lasers.
Gallium has a low melting point and is used primarily in electronics for semiconductor devices such as integrated circuits and diodes.
It is also a critical component in LED technology, where it helps produce bright, energy-efficient light. In medical applications, gallium is used in thermometers and radiopharmaceuticals.
Iridium is one of the most corrosion-resistant metals known, making it highly valuable in high-end applications such as spark plugs, crucibles for high-temperature work, and electrodes for medical devices.
It is also used in the manufacturing of specialty alloys that can withstand extreme environmental conditions, particularly in aerospace and automotive catalysts.
Silicon is crucial for the technology sector, particularly in the manufacturing of semiconductors and computer chips. Its properties as a semiconductor make it the backbone of the digital age.
Additionally, silicon is used in the production of solar panels and in the synthesis of silicone, a versatile material found in a myriad of products from medical implants to kitchen utensils.
Terbium is a rare earth element used primarily in green phosphors for color TVs and computer monitors, enhancing display technology with vibrant colors.
Additionally, terbium is utilized in small quantities in special alloys and in the development of solid-state devices, further evidencing its importance in modern electronics.
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