How Rare is Gold, Really?

 

How Rare is Gold? 

Gold is almost synonymous with rarity. Since the very beginning of human civilization, the precious metal has been an important symbol of wealth and social status, and this is in no small part due to gold’s extreme rarity. The rarity of gold in the Earth’s crust makes it an excellent medium of exchange, since the metal is difficult to mine and exists in small quantities. If gold was more common, it wouldn’t be nearly so valuable. 

Although gold is exceptionally rare, it is far from the rarest precious metal. Several precious metals are much rarer than gold. Even more surprisingly, some of these metals are cheaper to buy than gold, despite how rare they are. 

So how rare is gold, really? Geologists believe that gold is found at a rate of .004 parts per million (ppm) within the Earth’s crust. In other words, you’d have to mine 250 million ounces of Earth before you would be likely to find a single ounce of gold bullion. Talk about finding a needle in a haystack! 

The rarity of gold doesn’t tell the whole story of how this metal came to take humanity by storm. Even though it’s far more common than a few other precious metals, gold remains one of the most expensive materials on the planet. 

On this page, learn more about just how rare gold is, how it stacks up to other rare metals, and the factors that make gold such a valuable investment. 

Gold’s Rarity vs. Other Precious Metals

If you’re a precious metals investor, you already know that gold isn’t the only rare metal on the market. Millions of ounces of other precious metals like silver, platinum, and palladium change hands every year. Of course, rarity isn’t everything. The value of a precious metal depends on several factors, including supply-demand dynamics, industrial usefulness, and more. 

How does gold’s rarity compare to other precious metals? Gold is found at a rate of .004 parts per million in the Earth’s crust, making it rarer than silver (.075 ppm), platinum (.005 ppm), and palladium (.015 ppm) but is more common than rhodium (.0002 ppm) and a few other rare metals. 

Gold is significantly rarer than silver and rarer than platinum by a small margin. Gold, platinum, and palladium are rare, but they don’t even come close to the rarity of rhodium, a mysterious but extremely useful precious metal that many investors might not even know about. 

The Rarest of All Precious Metals: Rhodium 

Of the precious metals used to produce bullion coins and bars, gold isn’t even close to being the rarest. The rarest precious metal traded by investors is rhodium. Rhodium is found in the Earth’s crust at a rate of approximately .0002 parts per million. This means that, for every ten billion ounces of Earth’s crust that you search, you’re likely to find only two measly ounces of rhodium. 

Primarily because of its rarity, rhodium is significantly more valuable than gold. As of July 18th of 2024, rhodium is worth around $4,750 per ounce – almost double the current spot price of gold! 

What is rhodium, and why is it more expensive than gold? Rhodium is an extremely rare platinum group metal used in the production of catalytic converters. The lion’s share of global demand for rhodium comes from the automotive sector, and the usefulness of the rare material makes it even more expensive than gold. 

There are technically some precious metals that are rarer than rhodium, but these materials are rarely used to produce precious metal products. For bullion investors, rhodium is the rarest, most valuable, and most useful precious metal on the market. 

Annual Production of Popular Precious Metals

Despite being nearly as rare as gold, platinum prices tend to lag far behind the value of gold. This might seem confusing. Why would two similarly uncommon metals be sold at such different values? The annual global production of precious metals illustrates why gold tends to be more valuable than similarly rare metals. 

Why is gold more valuable than platinum? Despite being only a little bit rarer, annual global production for gold bullion is far higher than platinum, which makes it more expensive to buy. There are several reasons why the mining industry produces more gold yearly than platinum, but the main one is that demand for gold is greater than demand for platinum. Both supply and demand play roles in determining the value of precious metals, so it makes sense that gold would be more expensive than metals with smaller global markets. 

Here’s Why Gold is More Valuable Than Rarer Metals 

With a few notable exceptions, including rhodium, gold is the most expensive precious metal in the world. Gold prices have historically trended up, and the value of gold has never been higher than it is now. 

What makes gold more valuable than other precious metals? Gold is more valuable than other rare metals because it isn’t just rare – it’s scarce. Since gold is rare and demand for gold is always high, it sells for a higher price than other metals that offer exceptional rarity but lackluster demand. 

Rarity vs. Scarcity: An Important Distinction

In order to explain what makes gold so valuable compared to other metals, it’s important to understand the difference between scarcity and rarity. Rare objects are always valuable, but items that are rare and not particularly sought-after are almost always worth less than desirable rarities. 

What’s the difference between rarity and scarcity? Rarity refers to how uncommon a precious metal is, but scarcity represents an intersection between rarity and demand.

Consider, for example, a one-of-a-kind coffee cup. Since it’s one-of-a-kind, this coffee cup is rarer than any precious metal. However, even a one-of-a-kind coffee cup would sell for only a fraction of gold’s current spot price per ounce. The reason why is that there is little demand for the coffee cup. A one-of-a-kind item may be rare, but it isn’t necessarily scarce. 

When you combine rarity with demand, you can get a better idea of how scarce a commodity really is. 

Gold Isn’t Just Rare – It’s Scarce

Gold is scarce, meaning that it is both rare and highly sought-after. High demand for gold drives its price higher, even compared to other metals that are rarer but less in-demand. Mints use gold to create gold coins and bars, and multiple industries need gold in order to produce valuable products for consumers. 

By contrast, other precious metals like platinum are less sought-after than gold. Some metals may even be rarer than gold in the Earth’s crust but sell for a considerably lower price. While there are several reasons why gold is valuable, its scarcity is a fundamental quality that helped kickstart humanity’s love affair with the rare yellow metal. 

Final Thoughts: The Rarity of Gold Explained 

At an abundance of only .004 parts per million in the Earth’s crust, gold is undeniably one of the rarest metals on Earth. Because of gold’s scarcity, it even tends to be more valuable than some rarer materials. Ultimately, mankind’s obsession with gold is simple – we like rare, useful, beautiful things!