Hard assets – precious metals, gemstones and antiques – can be remarkably portable, concentrating significant dollar values in relatively small objects. This phenomenon gives rise to an idea I call “value density”. At its core, value density quantifies the dollar price of an item in relation to the volume it occupies.
The more dense and valuable an object is, the higher its value density. This concept is pivotal to anyone interested in alternative assets today. Tangible assets with high value densities are compact, making them easier to discreetly transport and securely store. As trust in traditional finance and banking continues to wane, value density becomes increasingly important for the savvy tangible asset investor.
Below is a chart showing the value density of various currencies and tangible assets expressed in dollars per cubic centimeter. Remember that these numbers, while current as of fall 2017, are subject to change due to fluctuating market prices.
| Tangible Asset | Value Density per Cubic Centimeter |
| Silver Bullion |
$ 5.73 |
| U.S. $100 Bills | $ 88.56 |
| European €200 Bills | $ 168.75 |
| Palladium Bullion |
$ 387.22 |
| European €500 Bills | $ 403.41 |
| Rhodium Bullion |
$ 476.79 |
| Platinum Bullion |
$ 644.81 |
| Gold Bullion |
$ 797.62 |
| Vintage 18K Gold Rolex Submariner (ref. 16618) | $ 1,010 |
| Ancient Gold Stater of Philip II of Macedonia | $ 16,849 |
| Sapphire | $ 198,990 |
| Diamond | $ 315,900 |
| Emerald | $ 326,400 |
| Ruby | $ 844,200 |
The first thing you’ll notice is that the precious metals vie with physical currency in the rankings. This is a bit misleading, however. The highest value note in the world that commonly sees circulation is the European €500 bill. The limited circulation Swiss 1000 Franc note doesn’t count.
A stack of €500 notes not only has a similar value density to an identical volume of palladium or rhodium bullion, but also weighs substantially less. But the European €500 note, while still legal tender, has been discontinued due to the irrational fear that it is used extensively by organized crime and tax cheats to stockpile ill-gotten gains. However, many experts believe the real reason the high denomination notes are being phased out is in preparation for an extended period of widespread negative interest rates in Europe.
The discontinuation of the €500 note leaves the €200 note as the European Union’s next largest denomination. With a value density of just $169 per cm3, the €200 note – along with every other nation’s physical currency, barring the uncommon Swiss 1000 franc note – falls significantly below the precious metal complex on the scale. Even a stack of redoubtable U.S. $100 bills only has a value density of about $89 per cm3. Only silver, the least valuable and dense of the precious metals, is lower at a mere $5.73 per cm3.
In contrast, palladium, rhodium, platinum and gold bullion have value densities that range from $387 to $798 per cm3. Interestingly, platinum, although slightly denser than gold, currently has a lower value density than the precious yellow metal. This is a very unusual situation; historically speaking, platinum has almost always been more expensive than gold.
Going further up the list we come to two very different antiques. The first is the iconic solid 18K gold Rolex Submariner (ref. 16618) wristwatch. This vintage wristwatch has a value density of just over $1,000 per cm3. Next on the list is an ancient gold stater coin of Philip II of Macedonia, struck during the mid 4th century BC. This numismatic masterpiece has a value density of nearly $17,000 per cm3 – a jaw droppingly high value.
But the very top of the chart is reserved for precious gemstones. The “big four” gemstones – sapphires, rubies, diamonds and emeralds – have value densities ranging from almost $200,000 to over $800,000 per cm3 for top quality specimens. This is only possible because of the amazingly high prices that nearly flawless gemstones of excellent color bring on the world market.
The positioning of gemstones near the top of our list helps explains the persistence of jewelry as a savings vehicle across the centuries. Throughout history, fine jewelry has traditionally been a way to display high quality, high value density gemstones. If you want to own exceptionally valuable and portable tangible wealth, few things can compare to fine jewelry.
There are, of course, some limitations to the concept of value density. For example, I used the prices of top quality gemstones and antiques when compiling the data for this list. Unless you are rolling in money, you are unlikely to purchase or own items of this superlative quality. The value density of more attainable art and antiques would naturally be somewhat lower, though still impressive.
The theoretical value densities for some tangible assets shown in the above list will also generally be lower due to their irregular shapes. This is a limitation that precious metals and physical cash will not share for the most part. Gemstones, on the other hand, may have incredibly high value densities, but cut stones cannot really be distilled down to completely fill a cube of space. There will always be air gaps. This may reduce the effective value density of gemstones by 50% or even more.
Antiques, jewelry and other abnormally shaped tangible assets will suffer even greater reductions in value density than gemstones. Of course, this is ultimately a very minor drawback. An effective value density of $5,000 or $10,000 per cm3 will be more than enough for most of us. Only the mega-rich have to worry about trying to shove a million dollars into a space the size of a lipstick tube. In any case, high value density is a compelling benefit if you are looking to put significant amounts of money to work in alternative assets.
