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Entries in Precious Metals (3)

Tuesday
Nov222011

Move Over Platinum, Now There’s Rhodium

Hemera/Thinkstock(NEW YORK) -- Forget platinum and gold, a silvery white metal called rhodium is gaining notoriety after a cameo appearance in this week's episode of Two and a Half Men.

More than 15 million viewers of the CBS sitcom may have taken notice when Ashton Kutcher's character proclaimed that his rhodium wedding band (not Kutcher's actual Demi Moore-related wedding band) was made of “the most expensive metal in the world.”  Soon after the episode aired, “rhodium” was trending online.

While it might have sounded like an exciting statement, it’s not entirely true.  According Steven Chillud, a research professor in the geochemistry division of Lamont-Doherty Earth Observatory at Columbia University, the supply and demand of rhodium creates fluctuations in pricing compared with gold. “There’s a hundred times more gold mined per year than rhodium,” says Chillud.

According to Deutche Bank, for every ounce of rhodium mined, there are actually 114 ounces of gold mined. However, gold can also cost more than rhodium since the demand is more consistent.

The reason, Chillud says, is that rhodium is mainly mined along with other metals, “which makes it expensive and [its] price varies dramatically.”

Element number 45 on the periodic table, rhodium was discovered by William Hyde Wollaston in 1804.

Part of the platinum family, it’s often used to plate white gold jewelry. In the modern era, rhodium has been used as a key component in the catalytic converter, which converts toxic exhaust emissions into less toxic substances, in automobile engines.

While rhodium remains in demand by jewelers, the recent economic downturn in the auto sector lead to a drop in rhodium prices, says Chillud. Rhodium plummeted from a high of $10,000 in 2008 to approximately $2,000 today.

With a price drop of nearly 80 percent, a rhodium wedding band might be a bargain after all.

Copyright 2011 ABC News Radio

Tuesday
Nov012011

Execs at Precious Metals Firm Charged with Fraud

Ablestock.com/Thinkstock(SANTA MONICA, Calif.) -- Goldline, a company that used endorsements from Glenn Beck and other conservative icons to sell hundreds of millions of dollars in gold to consumers, has been charged with theft and fraud in a 19-count criminal complaint filed Tuesday by local officials in California.

The criminal complaint filed Tuesday by the Santa Monica City Attorney's consumer protection unit marks the latest in a series of allegations it has leveled against the gold dealer, which pioneered the practice of weaving its sales pitches into broadcasts by popular conservative political personalities -- including two former presidential candidates -- to sell hundreds of millions of dollars' worth of gold every year.

The complaint alleges that Goldline "runs a bait and switch operation in which customers, seeking to invest in gold bullion, are switched to highly overpriced coins by using false and misleading claims," according to a statement released by the consumer affairs division of the Santa Monica City Attorney's office.

The company has been charged in the court filing with misdemeanors that include theft by false pretenses, false advertising and conspiracy, the city attorney's office said. In addition to the charges against the company, the complaint accuses former CEO Mark Albarian, executives Robert Fazio and Luis Beeli, and salespeople Charles Boratgis and Stephanie Howard of defrauding customers. Current CEO Scott Carter is accused of making false or misleading statements. Each of the charged offenses carries a maximum penalty of one year in jail and maximum fines of between $1,000 and $10,000 per offense.

Carter, who is frequently featured in Goldline commercials, told ABC News Tuesday that he was withholding comment until he has had time to review the court filing.

The launch of an investigation into Goldline was first reported by ABC News more than a year ago, when Santa Monica officials first said they were looking into allegations they said were leveled against the company by unhappy customers.

"There are two main types of complaints we're seeing," Adam Radinsky of the Santa Monica City Attorney's office said at the time. "One is that customers say that they were lied to and misled in entering into their purchases of gold coins. And the other group is saying that they received something different from what they had ordered."

Goldline officials said at the time that customer complaints were infrequent and that it responded immediately to address them. The proof of the company's commitment to customer satisfaction, they said, is Goldline's top rating from the Better Business Bureau. "When we learn that customers have not received the experience they deserve, we investigate and take action," said Carter, then Goldline's executive vice president, in a letter to ABC News sent last year.

The criminal complaint lays out a series of allegations that it contends add up to a conspiracy to trick customers into overpaying for an investment in gold.

For instance, the complaint alleges that the company trains salespeople to "get the money in" from customers on the promise of delivering gold bullion, with the intent to later switch the sale to far more overpriced collectable gold coins. It alleges that the company trains its employees "to disguise the more than 50 percent markup on the overpriced coins," and alleges that Goldline reprimands its salespeople if they fail to convince the customer to buy the overpriced coins.

At the heart of the complaint is the suggestion that Goldline profits not so much by selling pure gold bullion, but by persuading customers who want to capitalize on the rising value of gold to purchase collectable coins. The coins are subject to a significant mark-up in price, and several Goldline customers told ABC News that they found it difficult or impossible to resell those coins without taking a loss.

One of the customers was 63-year-old Joe Kismartin of suburban Detroit. He says what he heard on TV about gold and the Goldline company made a lot of sense.

"They got the commercials on TV and the way the economy's going I was figuring well, maybe I'll just do it for a little bit, save it for inflation, you know, in case something happens to the economy, it bottoms out and I've got something to fall back on, gold, rather than money," he said.

But Kismartin says he ended up losing almost half of the $5,000 he spent, because, he says, the Goldline salesman pressured him to buy overpriced gold coins, not the gold bullion he had seen in the commercials.

"I wanted to go bullion, I didn't want coins," he said. "I told the gentleman I don't want coins. He said I got the deal here, the special deal, I got Swiss coins. He more or less talked me into buying the coins."

When Kismartin took the coins to a local coin shop, he was told the $5,000 worth of gold coins he bought from Goldline five months earlier was worth just over $2,900, a loss of $2,100. "You know, I'm living month to month, that's a big loss."

Goldline disputes Kismartin's allegations against the company, saying it sells "a variety of products ranging from the most common bullion coins to exceptionally rare certified coins." Goldline said it looked into each case ABC News reported on last year and found that while both customers had initially complained, the company believed they wound up satisfied. And one of them -- Goldline did not identify which one -- was provided "a number of written disclosures at the time of purchase that went even further than Goldline's ordinary written disclosures," and yet went ahead with the purchase anyway.

In filing the complaint, officials have opened a new front in a long-running and very public dispute over the way Goldline has turned the sale of gold into a massive retail operation that capitalizes on popular conservative figures -- most notably Glenn Beck. The marriage of conservative talk and gold sales appears to make sense -- both have traditionally targeted an audience that is skeptical of the government, concerned about the nation's economic future, and uneasy about inflation and the stability of American currency. Neither Beck nor any of the other celebrity endorsers are accused of any wrongdoing.

The promotional strategy appears to have been beneficial both to Goldline, which boasts $500 million in sales, and to such conservative figures as Beck and former presidential hopefuls Fred Thompson and Mike Huckabee, all of whom have, at various times, coupled their television or radio appearances with Goldline advertisements.

When contacted last year, a spokesman for Beck noted that Goldline has an A plus rating from the Better Business Bureau.

Copyright 2011 ABC News Radio

Wednesday
Sep292010

Gold, Silver Surge to New Record Highs

Photo Courtesy - Getty Images(NEW YORK) -- Gold and silver prices surged to new records Tuesday as the dollar weakened against major currencies, continuing a trend that has left Americans scrambling for alternatives to traditional investments such as stocks and money market accounts.

Silver touched $22 an ounce Tuesday, the highest since 1980. Silver has surged 36 percent this year from less than $9 when the financial crisis began in 2008. Gold, which has increased 19 percent in 2010, jumped to $1,313 an ounce, the highest ever recorded.

With stocks in the dumps and government deficits spiraling, Americans are increasingly turning their attention to silver and other precious metals. The high price of gold has prompted investors to load up on cheaper silver. Silver has gained 21 percent in price versus gold this year. Low interest rates are another factor in the rush to precious metals, experts say.

Copyright 2010 ABC News Radio







ABC News Radio