Daily Gains Letter

rare earth elements


Forget Gold & Silver for Now: This Is the Mineral Investors Should Be Playing

By for Daily Gains Letter | Jul 26, 2013

Forget Gold & Silver for Now: This Is the Mineral Investors Should Be PlayingThere’s a rush happening in the U.S. economy, but no one seems to have heard much about it. No, it’s not for gold, silver, or oil. This time around, it has to do with rare earth elements, or what are sometimes referred to as rare earth metals.

Before going into further details about how investors may be able to profit from this situation in the making, it is necessary to know what these rare earth elements are and what they are used for.

Rare earth elements, at the very core, have many different uses. They are used in technology like cell phones, televisions, and lighting systems. They are also used in aerospace, automotive, and energy industries. Note that these are just a few of the uses of rare earth elements; there are many other uses for them, as well.

How critical are rare earth elements? According to Ian Ridley, director of the U.S. Geological Survey Central Mineral and Environmental Resources Science Center in Colorado, “without rare earths we’d be back to having black-and-white cellphones again.” (Source: “Gold rush trash is Information Age treasure,” USA Today, July 21, 2013.)

One must ask the question: why call it a rush?

As their name suggests, these elements are rare, found only in certain locations. This leaves them vulnerable to demand and supply shocks.

As a matter of fact, we saw something similar back in 2011. A rare earth element called neodymium, used in the automotive industry, could be purchased for $15.00 a kilogram in 2009. Fast-forward to 2011, and the price of this rare earth element reached $500.00 a kilogram; that’s an increase … Read More