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A Jadeite & Nephrite Jade Investor’s Buying Guide

A Jadeite & Nephrite Jade Investor's Buying Guide
Two pieces of Guatemalan rough jadeite jade serve as a backdrop for a 1940s vintage sterling silver pin set with half pearls and a small, vivid-green carved Burmese jadeite rosette.  The blue-green jadeite disc is a rare color known as “Olmec Blue” because of its popularity in the ancient Meso-American Olmec culture.

Jade is one of the best kept investment secrets of the modern age.  Although prices for the underappreciated gem have skyrocketed over the past 20 years, most people have been completely unaware of its investment prowess.  These frenetic price increases have been driven primarily by the rise of China as an economic superpower.  Jade is deeply treasured in Chinese culture, having been revered in the Middle Kingdom for thousands of years.

“Gold is valuable, but jade is priceless.” – an old Chinese proverb

But after centuries of ignoring jade, the West is finally beginning to wake up to the true rarity and value of this superlative gemstone.

This trend first began in 1997 when a breathtaking necklace composed of 27 perfectly matched Imperial jadeite jade beads – dubbed “Doubly Fortunate” – sold at Christie’s auction house for a jaw-dropping $9.39 million U.S. dollars.  Since that time, a steady stream of multi-million dollar, record-breaking auctions have firmly established jade as a bona fide high-end gemstone in the eyes of a global audience.

In 2008, the Beijing Olympics were held in China.  With the Olympics granting the country a global venue for the first time in the modern era, China took the opportunity to advertise its most prized material: jade.  Every official 2008 Olympic medal combined a traditional Chinese jade bi, or holed disc, with the time-honored gold, silver or bronze as appropriate.

2008 Beijing Olympic Medals

Photo Credit: GIA

Try as it might, the Western world can simply no longer overlook the aesthetic and cultural significance of jade.

There are two gemologically distinct forms of jade: nephrite and jadeite.  I won’t cover the differences between nephrite and jadeite jade here.  Suffice it to say that they have very similar physical properties and are both considered true jades from a gemological, monetary and cultural standpoint.  Jadeite jade is the scarcer of the two varieties, but any high quality jade – regardless of whether it is nephrite or jadeite – is quite desirable and will fetch strong prices.

Judging Jade Quality

There are three major characteristics to look for when investing in jade: translucency, texture and attractive coloration.

Translucency is the ease with which light can pass through an object.  With jade, the more translucent the stone, the more valuable it is.  The most expensive jades are highly translucent, which gives them a diffuse, velvety appearance as they reflect light back to the viewer from deep within the stone.  Opaque jades, on the other hand, will appear flat and one-dimensional in comparison.

The texture of a jade is also quite important in determining its value.  This can vary from a coarse texture, where individual crystals or fibers are readily visible, to a very fine texture, where effectively no internal structures are evident.  A finely textured jade is much more desirable than a coarsely textured one.  This is partly because the finer a jade’s texture, the greater its translucency.

Color is the final factor in assessing a piece of jade.  Bright, pure and vibrant colors (typically greens, whites, blues and lavenders) are the most valuable.  In addition, the color will ideally be evenly distributed throughout the stone, with little variation or mottling.  Less desirable colors like browns, grays or blacks (unless pure black) will drag down the value of a piece.

I use these criteria to break jade down into three major quality categories: decorative, carving and jewelry.

Decorative Quality Jade

The lowest tier is decorative quality jade.  This jade is invariably coarsely textured and completely opaque, with no translucency whatsoever.  In addition, its color is often dull, splotchy or otherwise imperfect.  It is quite common for decorative quality jade to contain healed fractures or non-jade mineral intrusions.

25 or 30 years ago, this type of low quality jade was simply abandoned at the mine site because it had no commercial value.  But starting in the 1990s, there was a concerted effort to employ it in high-volume decorative uses (hence the name).  Today, this kind of jade is used in premium floor and backsplash tiles, sink vanities and even kitchen countertops.  It might also be used for low quality statues, bookends or other household decor.

Carving Quality Jade

The next tier up in quality is carving jade.  This mid-range quality jade varies from being completely opaque to slightly translucent.  Likewise, its texture can range from coarse to medium.  The color palette of carving quality jades is generally much more evenly distributed and attractive compared to decorative jades.  However, it will usually lack the wow factor characteristic of the highest quality jades.  Carving quality jade might have some healed fractures, but non-jade mineral intrusions will usually be minimal.

As the name implies, carving quality jade is most frequently used for carved statues, objets d’art, and other fairly high-end décor.  It is also sometimes used in jewelry, but this will normally be lower-end to mid-range jewelry.  When working with jade of this quality, a skilled carver can hide healed fractures and areas of poor color within a finished piece’s overall design, thus maximizing the value of the rough.

Jewelry Quality Jade

The highest quality tier for jade is what I call jewelry quality.  This jade will possess medium, fine or very fine texture.  The finer texture of jewelry quality jade contributes to its greater translucency, which is a very desirable attribute.  Jewelry quality jade can vary from being slightly translucent to extremely translucent, with large increases in value for relatively small increases in translucency.

The colors found in this quality of jade are always attractive; it is just a question of how attractive.  Some examples of the most desirable jade colors are Imperial green jadeite, which can look like the finest emerald, and mutton fat nephrite, which has a lustrous, creamy-white tone similar to porcelain.  Color distribution is typically good to excellent, with little mottling.

I should note that in some instances strong color contrasts are desirable.  For example, moss-in-snow jade has grass green areas randomly sprinkled against a white background.

Jewelry quality jade is extremely rare and therefore used exclusively for high-end jewelry or expensive objets d’art.  Every single part of the jade rough is used in order to minimize waste.  Cabochons, bangle bracelets and carved pendants are typical products.  Bangles made from jewelry quality jade are particularly desirable, as it can be quite difficult to find rough material large enough to fashion into a single-piece bracelet.  Jewelry quality jade is quite expensive and even the lower-end of this quality spectrum is coveted.

I want to remind readers that these are my personal jade quality rankings, and are not industry standard.  In addition, there are no clear distinctions between the quality categories.  High end decorative quality jades blend seamlessly into low end carving quality jades.  Likewise, the best carving quality jades merge into the bottom-rung of the jewelry quality jades.

 

Untreated Nephrite & Jadeite Jade Bangles for Sale on Etsy

(These are affiliate links for which I may be compensated)

 

A Brief History of Jade Connoisseurship

Jade’s modern history begins in 1784, when, according to legend, jadeite jade was first imported into China from Burma (now Myanmar).  Until this time all the jade available in China was native nephrite material.  Nephrite jade had been central to Chinese culture for thousands of years by that time, having served both ceremonial and artistic functions.

Although experienced Chinese jade dealers could tell the new jadeite stone was different from their traditional nephrite jade (by touch of all things!), they still accepted jadeite as a legitimate substitute because of its nearly identical physical properties to nephrite and its bright, saturated colors.

Today, both nephrite and jadeite (and indeed all green hardstones) are known in China by a single word: “yu”.  This symbolizes just how intertwined the two stones are in modern Chinese thought.

As the 19th century progressed, the Chinese gradually began to esteem jadeite jade more and more compared to nephrite.  It is believed that the Dowager Empress Cixi, who secretly ruled as the power behind the Imperial throne from 1861 until 1908, was instrumental in this cultural change.  She had a huge fetish for Imperial jadeite jade and amassed a massive collection of fine quality pieces.  By the time Cixi’s shadow reign ended in the early 20th century, jadeite jade (particularly the highly-translucent Imperial green variety) was firmly embedded in Chinese culture as a first among equals.

Despite the Chinese people’s undying love for jade, for many centuries the Western world didn’t much care for the unfamiliar green stone.  Europe had no high quality jade deposits available in close geographic proximity and therefore didn’t develop a jade tradition beyond the Neolithic era.

When the Spanish conquistadors conquered South and Central America in the 16th century, they were looking specifically for gold and silver.  Jade, which was highly valued by the pre-Columbian Meso-American civilizations, didn’t interest them in the least.  This was most likely because the conquistadors had never seen jade before and had no idea what it was.

This difference in the attitudes between the jade-loving cultures of Central America and the jade-indifferent Europeans is best illustrated by an apocryphal story about the conquistador Hernán Cortés and the Aztec ruler Moctezuma II (also known as Montezuma):

“Cortés and Montezuma were accustomed to play each day a native game which in many ways resembles chess… It was their further custom at the close of each day’s game to present each other with some gift. At the close of one day’s game the Aztec monarch presented Cortés with several large discs of gold and silver handsomely worked. Cortés was greatly pleased and so expressed himself. Montezuma smiled and said: ‘The gift tomorrow shall be such that today’s gift will seem in value and preciousness, when compared with it, as no more than a single stone tile on the roadway…’ The royal treasurer of Montezuma brought in on a golden salver the royal gift, four small carved jade beads. The bitter disappointment of Cortés was so great that he could scarcely conceal it.”

When jade finally broke onto the European stage, it did so from a completely unexpected source: Russia.  Large deposits of fine green nephrite were discovered in Siberia’s Sayan Mountains near the Lake Baikal region in the 1820s.  Although word of the new find took a few decades to spread, by the late 19th century the famous Russian luxury house of Faberge was creating unmatched masterpieces in Siberian nephrite jade.

The adoption of jade in Russia was undoubtedly aided by the fact that red and green were the official colors of the Romanov Czars.  So any gem found in the Motherland with one or both of these colors quickly piqued the interest of Russian nobility.  Green demantoid garnet, green nephrite jade and the ultra-rare, red-green color-change gemstone Alexandrite were the primary beneficiaries of this trend.  All three gems skyrocketed in popularity in pre-Revolution Czarist Russia.

By the 1880s and 1890s, Western European jewelers were beginning to experiment with jade on a large scale.  This was due to a cultural pincer move, with European interest in Orientalist art and antiquities driving curiosity on one side and Russian Czarist patronage advancing it from the other side.  Incidentally, this is also the time when many wealthy Europeans began avidly collecting old Chinese and Mughal Indian jade carvings.

But jade didn’t really hit the big time in the West until just after World War I.  When the Great War broke out in Europe in 1914, the United States was initially neutral.  However, the massive conflict cut wealthy U.S. tourists off from their normal European playgrounds.  Many of these U.S. tourists chose to vacation in the Far East instead, with China often near the top of the destination list.

Jade was a natural part of this cultural exchange.  Many wealthy families returned to the U.S. with jade carvings or jewelry, both antique and modern.  Chinese culture – with jade front and center – was viewed in the West as exotic, seductive and perhaps slightly dangerous.  This U.S. cultural obsession with China bloomed during the 1920s, when all things Chinese – from stir fry to jade carvings – became ultra-fashionable.

As a result, the Art Deco period of the 1920s and 1930s was a golden age for jade jewelry in the West.  Renowned luxury houses such as Cartier, Van Cleef & Arpels and Tiffany & Co. created magnificent jade jewelry during this period.  Carved jade plaques, some imported directly from China, were often set in platinum or gold and then surrounded by sparkling diamonds, black onyx or rich enamels.

Although the mania for Chinese fashion in the U.S. gradually diminished during the 1930s, jade remained a staple of the jewelry world in the West.  This was particularly the case on the U.S. West Coast, where large numbers of Chinese immigrants and their descendants lived.

Two of the most celebrated jade-centric jewelers in America during the mid 20th century were Ming’s of Hawaii and Gump’s of San Francisco.  Ming’s jewelers created Hawaiian and Asian-themed jewelry that was liberally sprinkled with pearls, ivory and jade.  They opened in 1941 and at one time had satellite stores in San Francisco, Houston, New York, Miami and other major American cities.  The last two Ming’s stores, located in Honolulu and Hilo, closed in early 1999.

Gump’s was a small San Francisco luxury house founded in 1861 that sold everything from high end jewelry to Chinese antiques to fine furniture.  But they were most famous for their high quality jade jewelry.  One of the firm’s early 20th century owners, A.L. Gump, was acclaimed as the blind jade dealer – a gifted savant who could determine the genuineness and quality of jade merely by using his sense of touch.  Gump’s declared bankruptcy in August 2018 due to its excessive debts and was subsequently forced into liquidation.

To the best of my knowledge, neither Ming’s nor Gump’s ever handled treated jades – an important consideration for anyone looking to invest in vintage jade jewelry.

 

Vintage Ming’s & Gump’s Jade Jewelry for Sale on eBay

(This is an affiliate link for which I may be compensated)

 

Jade Treatments

And this brings us to our next topic: jade treatments.  High quality jade is extremely rare; therefore,  enterprising but shady gem dealers have developed artificial treatments that enhance the color and minimize the defects of otherwise mediocre specimens.  These different treatment levels are labeled Grade A jade, Grade B jade and Grade C jade.

Grade A jade is completely untreated, except for the possible application of a traditional wax polish to a finished stone’s surface.  This wax can easily be removed, so it doesn’t permanently alter the jade in any meaningful way.

Grade B jade has been cooked in an acid bath for days or weeks in order to bleach out any impurities in the stone, improving its color and translucency.  It is then injected with polymer resins via a high speed centrifuge.  The resulting B jade is absolutely indistinguishable from high grade untreated A jade to the naked eye.  Only a gemological laboratory with infrared spectroscopy equipment can verify if a jade has been subjected to this treatment process.

Grade B jade is substantially chemically altered by its extended acid immersion and should no longer be considered jade in the strictest sense.  In addition, the polymer will degrade over time, leading to brittleness and discoloration.  B jade might look like A jade, but is only worth 5% to 10% of the value of a similar quality untreated piece.

Grade C jade has been dyed to improve its color.  However, this treatment is unstable and the beautiful colors will fade dramatically over time.  Grade C jade can be very difficult to separate from A jade, even for those with substantial gemological experience.  A UV light or Chelsea color filter may help in determining if a jade has been dyed.

Sometimes very poor quality jade is subjected to both B and C treatments.  This jade is the worst of the worst.  It isn’t even suitable for cheap fashion jewelry, regardless of how low the price might be.

I should also note that the treatments mentioned above are typically applied to jadeite jade, although they are occasionally used on nephrites as well.

I’m going to make things very simple here.  If you are a jade investor, connoisseur, or even just looking to buy a high quality piece of jade jewelry, then you need to stay far, far away from both Grade B and C jades.  Only completely natural, untreated Grade A jade is acceptable.  But you can’t necessarily trust a seller to disclose these treatments, even though it is unethical not to do so.  This has significant implications for jade investors, which I will get into later.

The Value of Untreated Vs Treated Jade over Time

Photo Credit: MAYS

Jadeite Jade Sources:

Burma – The Mogok region of Myanmar (formerly known as Burma) is the world’s primary source of high quality jadeite jade.  Whites, greens and lavenders are the most commonly encountered colors from this region, with vivid emerald-green Imperial jadeite being the most desirable.  Unfortunately, many lower quality Burmese jades are artificially enhanced in order to imitate higher quality, more expensive jades.  This makes purchasing Burmese jade a minefield for jade investors.

Russia – The polar Urals are a minor source of whitish to greenish jadeite jade.  The very best material can approach the saturated color of Burmese Imperial jadeite.  However, the extreme remoteness of the mine location (it resides above the Arctic Circle), coupled with the paucity of good quality material, makes mining here relatively uneconomic.  Whatever fine Russian material does reach the market is almost certainly rebranded as Burmese jadeite in order to increase its appeal to buyers.

Guatemala – The Motagua River valley in Central America was the sole source of the jades used by the pre-Columbian Olmec, Mayan and Aztec civilizations.  After they were conquered by the Spaniards, the secret of their jade mines was lost for hundreds of years.  It was only in the mid 1970s that an amateur archeologist named Mary Lou Ridinger rediscovered the ancient workings.

Guatemalan jadeite jades come in a wider range of colors than that of any other jadeite location.  These include black, white, yellow-orange, blue, lavender and every shade of green imaginable.  However, most Guatemalan jade is opaque or only slightly translucent.  As a result, it is very unusual for Guatemalan jade to approach the very finest Burmese Imperial jadeite in terms of quality.  Even so, high quality Guatemalan jadeite does exist and is quite desirable.

Nephrite Jade Sources:

Siberia – Bright apple-green nephrite from Siberian Russia has been a staple of the jade trade since the mid 19th century.  The Eastern Sayan Mountains near Lake Baikal is the source of most of this material.  A lot of Siberian jade is peppered with tiny black dots of chromite (FeCR2O4), which can help in positively identifying the source of unattributed pieces.

Whites (often modified with brown) and light-to-medium greens are the most commonly encountered colors.  Siberian nephrite is generally characterized by even color and good translucency, which can make it extremely desirable and expensive.  It is fairly rare to find Siberian jade in the West these days because almost all of the good quality material goes straight to China, where it is highly prized.

British Columbia – The mountainous Canadian Pacific coast is the world’s nephrite jade powerhouse.  It is currently the largest and most reliable producer of good quality nephrite jade, eclipsing other traditional nephrite producers such as China and Siberia.  This has transformed the region into a vital supplier to the Chinese market over the past 25 years.

British Columbian nephrite generally varies in color from a light, yellowish-green to a dark, spinach green.  Translucency is usually mediocre, but can vary considerably.  The very finest Canadian nephrite jade, known as Polar jade, is a bright green color with excellent translucency.  Nephrite of this quality is quite expensive and rare.

China – The rugged Western Chinese province of Xinjiang is the traditional source of China’s high quality nephrite jade.  These jades are often referred to as Hotan, Hetian or Kunlun jade in the industry.  Chinese nephrite jades generally originate in the Kunlun or Altai Mountains, but are washed into secondary deposits in the adjacent river valleys where prospectors scour the waterways for them.

The finest of these is the so-called “mutton fat” white jade, but browns and greens are also quite common.  Having been exploited continuously for thousands of years, these native Chinese nephrite deposits are very close to being worked-out.  Chinese jades can appear almost identical to some Siberian jades, undoubtedly because the two regions host different ends of the same geological features.

Wyoming – Nephrite jade was first commercially mined in Wyoming during the original American “Green Gold Rush” of the 1930s.  However, mining tapered-off in the 1960s when superior quality material was discovered in British Columbia.  Unlike the alluvial deposits found in most other areas, secondary deposits of Wyoming nephrite generally occur as wind-scoured “slicks”.

A lot of Wyoming jade tends towards darker olive and sage tones that are rather opaque, limiting the value of most material.  But the very best Wyoming material is a bright apple green that can rival the highest quality British Columbian nephrite.  However, the most famous Wyoming nephrite is undoubtedly Edwards black jade, which is widely regarded to be the finest black jade in the world.

California – Many jade hunters gravitate towards the California coast at Big Sur, near the famous Pacific Coast Highway 1.  This is because phenomenal nephrite ocean jades can be found in the area by beachcombers and divers.  Ocean jades are boulders or nodules that have been worn smooth by millennia of constant wave action.  As a result, ocean jades are almost always very tough, compact material.

Big Sur jades can vary in color from black to blue to greens of all hues.  Most California jade tends toward the opaque end of the spectrum and factures are common.  But occasionally good quality translucent material is found.  Jade from California only comes to the market in low volumes and isn’t currently very commercially important.

New Zealand – Nephrite jade and other similar greenstones have been exploited by the native New Zealand Maori culture for many centuries.  Most of the jade harvested here is alluvial, having been washed down from the towering Southern Alps mountain range on the South Island.

New Zealand jade is often of medium tone with only slight to moderate translucency.  It is generally not considered commercially important, no doubt because the export of rough jade from New Zealand has been effectively banned since 1947.

 

Untreated Rough Siberian Nephrite Jade for Sale on Etsy

(These are affiliate links for which I may be compensated)

 

Identifying Jade

Jade has a variety of impersonators that populate the low-end jewelry market.  These include look-alikes such as chrysoprase, serpentine, aventurine quartz, hydrogrossular garnet and maw-sit-sit, just to name a few.  It can be very difficult to tell these imitation stones apart from real jade just by appearance alone.  However, there are a few tricks that savvy jade investors can use to give themselves an advantage.

The first is how the stone feels.  Unlike more conventional gemstones that rely solely on their good looks, jade is a very tactile stone that is meant to be touched.

The first thing you will notice about true jade is its substantial weight; both nephrite (2.9 to 3.2 g/cm3) and jadeite (3.2 to 3.45 g/cm3) have relatively high densities compared to most jade imitations.  For example, a piece of real jade will tend to feel heavier in the hand than a similar sized piece of aventurine or chrysoprase, which only sport densities of around 2.6 to 2.7 g/cm3.

The next thing you will immediately notice about a piece of true jade is the fact that it feels very slightly greasy or waxy to the touch (even though it is perfectly clean).  This characteristic is more noticeable with nephrites than jadeites, but both varieties share it to some degree.  This was one of the key ways that ancient peoples could distinguish true jades from other similarly colored gems.

This greasy or waxy texture is also reflected in the gem’s luster, often conferring a soft, diffused or dreamy look to jade.  This is one of the attributes that can trick a casual observer into believing that jade is very soft when it is actually harder than steel.  Of course, real jade can also have a vitreous luster, which is more glass-like.  Once again, nephrites will tend more towards a subtly greasy or waxy luster while jadeites will more often have a vitreous appearance.

Jade also possesses extremely high thermal conductivity.  If you take a piece of jade and place it against a sensitive part of your face such as your lips or cheeks, you will immediately notice how persistently cold the stone feels.  Imitation jades will often warm up quickly when subjected to the same test.

The last quick trick for spotting true jade is its internal crystalline structure.  Translucent jadeites will most often have a granular, sugar-like texture when viewed under a 10x jeweler’s loupe.  Nephrites will usually have a felt-like or inter-woven fibrous appearance.  There can be crossover here though, so some jadeites can have a fibrous structure while it is possible for nephrites to be granular.

In addition, if the texture of a jade is extremely fine (which is common in very high quality specimens) it might not be possible to discern any internal structure.  Also be aware that in certain circumstances the crypto-crystalline members of the quartz family (primarily chrysoprase and aventurine) might also appear slightly granular under high magnification.

Keep in mind that these identification tricks are not foolproof.  They require experience to use effectively and each one has its individual strengths and weaknesses.  Nonetheless, they can help give you an edge in determining real jade from its many imitations.

 

Vintage Jade Jewelry for Sale on eBay

(This is an affiliate link for which I may be compensated)

 

Investing in Jade

So now we arrive at the crux of this article.  What are the best jades to buy from an investment perspective and how do you find them?

First, I think it is imperative that you avoid Burmese jadeites or Chinese nephrites.  I don’t advise this because these jades are “bad” in any way.  To the contrary, they can be some of the most beautiful jades on the planet.  However, Chinese demand has driven the prices for jade from these specific sources through the roof.  This insatiable demand has also driven unscrupulous jade dealers to artificially treat these jades in an attempt to provide more gem-quality supply to the market.

So when I encounter jades from Burma or China, my baseline assumption is that they have all been subjected to treatments, which renders them uninvestable.  Of course, if a beautiful Burmese Imperial jadeite or Chinese mutton-fat nephrite is presented by a reputable dealer with a certification stating no-treatment from a respected Western gem laboratory such as GIA, IGI, AGL or Gubelin, then I very well might make an exception.  But such gems would be quite rare and very expensive.

Instead, I prefer to exploit some intriguing mispricings that are currently present in the global jade market.

The biggest of these applies to North American jades – Guatemalan jadeite, British Columbian nephrite, and California/Wyoming nephrite.  Because Chinese buyers aren’t as familiar with these types of jades, the insatiable overseas demand for their “brand” hasn’t developed yet.  This cultural foible represents an interesting arbitrage opportunity to savvy jade investors.

British Columbian jade is already being exported in quantity to China, but good-quality material that is close enough in appearance to Chinese nephrite is often rebranded upon its arrival to enhance its perceived value.  To the best of my knowledge, relatively little Guatemalan jadeite or U.S. nephrite is currently exported to China.

Another huge bonus for North American jades is that they are almost always untreated.  This means it is possible to confidently buy these jades without relying on expensive and difficult-to-obtain gem lab certifications.  I suspect the no-treatment rule for North American jades may change in a couple decades once they’ve become more popular, but for now it is a gem investor’s paradise.

Finally, I think that as the traditional sources of high quality Asian jades – primarily Burma and China – progressively exhaust their centuries-old mines, the global jade market will have no choice but to turn to North American material to fill the gap.  This will lead to persistently rising prices for North American jade over time.

I don’t want to ignore Siberian jades in my investment analysis.  Not only can they be stunningly beautiful and highly desirable stones, but they are also treated far less frequently than Burmese or Chinese jades.  The only problem is that almost all the good quality Siberian material goes straight across the border from Russia into China these days.  Jade investors and connoisseurs in Europe or the United States hardly ever see fine Siberian jade anymore.

One exception to this rule is when an old U.S. or European estate or gem collection is liquidated.  Another is when an established Western gem dealer has old, stale inventory.  In those instances, it might be possible to find very high quality Siberian jades for good prices.  But these are fairly rare occurrences.

Rough Jade

The first kind of jade that I recommend for investment purposes is rough jade.  This consists of water-worn nodules or roughly-cut blocks of raw jade that haven’t been turned into a finished product yet.  One of the reasons I favor rough jade is because the possibility of treatment is even more remote than when dealing with finished jade jewelry or carvings.

You do have to exercise caution with jade nodules because it isn’t always possible to determine the overall quality of the jade inside.  On the other hand, a jade block or slab that has been cut on multiple sides allows a direct view into the stone, thus letting investors know exactly what they’re buying.

Pricing for North American rough jade is often very attractive.  Unfortunately, it is also the most illiquid form of jade, being potentially difficult to resell on short notice for a fair price.  I suspect this illiquidity will diminish as jade’s reputation continues to improve in the West.

Pricing can start as low as $50 to $100 a kilo for good carving quality rough, but escalates quickly for gem quality material.  The finest North American rough can easily run $1,000 a kilo, if not more.

Jade Bangle Bracelets

Bangle bracelets are the most commonly encountered form of jade jewelry.  In fact, they are something close to a cultural phenomenon in China – every woman of means owns at least one.  It isn’t unusual to walk into a mid-range jewelry store in Hong Kong, Shanghai or Beijing and see jade bangles selling for $10,000, $20,000 or even $50,000 a piece.  The Chinese value them almost as a form of portable money – a sort of gold bullion for the wrist.

One of the reasons jade bangles are so highly valued is because only large pieces of high quality jade can be used in their creation.  There can be absolutely no cracks, fissures or other irregularities present in the rough.  And on average only three bangle bracelets can be obtained from an optimally-shaped one kilogram slab of rough material.  As a result, high quality jade bangles are probably the most value-dense, liquid form of jade in existence, making them very attractive to investors.

Keep in mind that jade bangle bracelets can be carved with decorations.  In most instances this is done to hide uneven coloring, healed fractures or other undesirable traits.  You generally want a jade bangle with a smooth surface.

Reasonable quality North American jade bangles starts at around $300 to $400.  Anything below that price is typically junk.  Really fine Guatemalan jadeite or Wyoming/California nephrite bangle bracelets can often be found in the $800 to $2,000 range.  On rare occasions it is possible to find a nice Siberian jade bangle for a few thousand dollars.

Antique & Vintage Jade Jewelry

1920s Art Deco Jadeite Jade Brooch

Photo Credit: K47DDC
This Art Deco platinum, gold and diamond brooch from the 1920s is set with a high-end jadeite jade.  This impressive piece of antique jade jewelry sold on eBay in June 2019 for only $1,000 – a tremendous bargain considering that the jade it contains is only one step below the legendary Imperial jadeite in terms of quality.

Polymer-impregnated Grade B jade was first developed in the 1980s.  This means that any jade mounted in older, pre-1980s jewelry can’t have been subjected to this treatment.  Therefore, vintage and antique jewelry represents one of the only safe (and potentially inexpensive) sources of high quality Burmese jadeite or Chinese nephrite in the marketplace today.  This is the only situation where I feel it is acceptable to buy Burmese and Chinese jades – in part because almost all antique jade jewelry you encounter will be mounted with stones from these regions.

I recommend that jade investors only consider purchasing vintage jewelry that dates from the 1960s or earlier.  Why not green-light 1970s jewelry?  For one, dating jewelry is an art, not a science.

It is possible that the vintage piece you believe to be from the mid 1960s is actually from the mid 1970s.  In that instance, you are still safe from polymer-impregnated jades.  But if the piece you think is from the 1970s actually turns out to be from the 1980s, you may have just made a very expensive mistake.  Sticking to 1960s vintage jewelry and earlier provides a margin of safety that is invaluable to serious jade investors.

There are two additional caveats for those looking to invest in antique jade jewelry.

First, jades have been dyed since the 1950s, so there is the possibility that jade mounted in some older jewelry might have been dyed.  However, these pre-modern dyes were almost always organic dyes that tended to fade very quickly.  In effect, any organic-dyed jade that has seasoned for half a century or more will have faded back to its natural color.  In other words, regardless of whether a piece was dyed or not in the distant past, what you see is what you get today.

Secondly, it is possible that an antique piece of jade jewelry has had its stones replaced at some point within the recent past.  And any modern replacement stones could conceivably have been treated.  This would have happened most often to damaged jewelry, so be wary of old jade jewelry showing obvious signs of repair.  However, replaced stones are exceptionally rare in my experience.

Pricing for investment grade vintage jade jewelry will normally start around $300.  It’s tough to find anything truly worthwhile below this price point, although you can sometimes get lucky.  Some very compelling antique jade jewelry can be found in the $1,000 to $2,500 range.  And truly spectacular vintage pieces are available for those willing to spend $3,000 or more.

Jade is one of the best kept hard-asset investment secrets of the modern age.  But I believe my jade investor’s buying guide will give you the knowledge and tools you need to successfully profit from this exceptional gemstone.

 

Read more in-depth Antique Sage bullion & gemstone investment guides here.

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Read more in-depth Antique Sage vintage jewelry investment guides here.


Antique Samurai Sword Fittings – Tsuba, Fuchi, Kashira, Menuki & Kozuka

Antique Samurai Sword Fittings - Tsuba, Fuchi, Kashira, Menuki & Kozuka
A fine Japanese kashira and fuchi set from the late Tokugawa shogunate, circa 1840 to 1868.  While many antique samurai sword fittings are made from copper alloys, this rare set is made from solid silver with gilt edges (not visible in photo).  It is also decorated with the kamon of the respected Asano clan – two crossed hawk feathers within a circle.

Although we might not always realize it, myth is a vital part of human society.  And while the topic might first prompt thoughts of ancient Greek and Romans deities, there are other mythologies that are just as relevant to our modern era.  The specific myth I have in mind is that of the tenacious Japanese samurai warrior and his deadly sword.

The Japanese samurai has become a mainstay of global pop culture.  Classic works such as the 1954 movie Seven Samurai, the 2005 anime series Samurai Champloo and the 2011 video game Total War: Shogun 2 have all contributed to the modern myth of the samurai.  At this point, the samurai and his famous katana sword are recognized around the world as unofficial mascots of the storied island nation.

But what if I told you that you could afford to own a tangible piece of the samurai myth?  And I mean a real, historical bit of the legendary Japanese fighter – not some cheap, modern reproduction.

Antique samurai sword fittings – the metal mountings used to secure and decorate katana, wakizashi and other Japanese swords – are hand-forged works of art straight from Japan’s celebrated feudal past.  Most date no later than the end of the Japanese Tokugawa shogunate (circa 1868), making them at least 150 years old.  And they often have incredible attention to detail that must simply be seen to be believed.

These historically important items were used to display a samurai’s wealth and social prominence.  But even more importantly, antique samurai sword fittings represent the physical heritage of a proud warrior class who considered their swords to be sacred.  According to the great 17th century shōgun Tokugawa Ieyasu, the sword was the “soul of the samurai”; a katana’s mountings were no less hallowed.

 

Types of Antique Samurai Sword Fittings

There are 5 major kinds of samurai sword mountings: the tsuba, fuchi, menuki, kashira and kozuka.

Tsuba

The tsuba is a sword guard, meant to protect the sword-wielder’s hands from an opponent’s sword slashes.  While sword guards often took on elaborate basket forms in Renaissance Europe, the Japanese tsuba was a much simpler affair.  It was usually a flat oval or round disc of metal with up to three holes.

The central hole, or nakago-ana, is always present and accommodated the sword blade.  The hole on the left is called the kozuka hitsu-ana.  It was meant for the kogatana, a samurai’s small utility knife that was affixed to the outside of the scabbard.  The hole on the right is called the kōgai hitsu-ana.  It held a kōgai, a long metal hair-pin that samurai traditionally used.

Not all of these holes appear on all tsuba.  Some antique tsuba only have the central sword hole (nakago-ana).  Others have both the nakago-ana and the kozuka hitsu-ana for the utility knife.  Still others have all three.  It is common for earlier dated tsuba to lack one or both of these extra holes because they were designed solely as weapons of war – no extra frills necessary.

Fuchi

A fuchi is a metal collar sandwiched between the tsuba (sword guard) and the sword handle, right at the top of the hilt.  They are usually rather short, rarely exceeding a height of more than 15 mm (0.6 inches).

Menuki

Menuki are a pair of small, matching decorations placed on either side of the sword handle.  These were originally utilitarian, covering the steel pins that fastened the sword handle to the tang.  They later evolved into ornamental items as Japanese sword construction techniques advanced.  However, some modern-day sword enthusiasts claim that menuki give the swordsman a better grip on the handle.

 

Antique Samurai Sword Menuki for Sale on eBay

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Kashira

The kashira is the end-cap of a samurai sword, also known as a pommel in Western parlance.  It resides at the very bottom of the sword handle, helping to keep it firmly in place.  Because they are one of the most readily visible parts of a sheathed sword, Japanese kashira were sometimes elaborately decorated.  Fuchi and kashira were often made in matching pairs.

Kozuka

The kozuka is the metal handle of a samurai’s utility knife, or kogatana.  Although not technically part of a samurai sword, the kogatana/kozuka was often secured to the sword via the kozuka hitsu-ana hole in the tsuba.  These elongated rectangular handles rarely measure more than a few inches (10 cm) in length.  Their diminutive size did not stop the Japanese from lavishly decorating them, which also had the added bonus of helping a samurai maintain his grip on the small handle.

 

A Short History of the Samurai

I believe that in order to truly appreciate the mystique of antique samurai sword fittings, we must first understand the history of the samurai.

 

A Chronological List of Japanese Eras

  • Asuka period (538 to 710)
  • Nara period (710 to 794)
  • Heian period (794 to 1185)
  • Kamakura period (1185 to 1333)
  • Muromachi period (1333 to 1568)
  • Azuchi–Momoyama period (1568 to 1600)
  • Sengoku period, Aka the Age of Warring States (1467 to 1600)
  • Edo period, Aka the Tokugawa shogunate (1600 to 1868)
  • Meiji period (1868 to 1912)
  • Taishō period (1912 to 1926)
  • Shōwa period (1926 to 1989)
  • Heisei period (1989 to the present)

 

The origins of the samurai are murky, but are believed to date back to the early Heian period in the 8th and 9th century AD.  It was during this time that Emperor Kanmu in Kyoto resolved to conquer the Emishi people who resided in the northern part of the Japanese mainland.  He recruited powerful Japanese clans headed by shōguns to subjugate his enemies.  These tribal shōguns built large armies of strong mounted warriors who were skilled in archery and swordsmanship.  These mounted soldiers gradually evolved into samurai swordsmen, completing the transition by the 12th century.

Medieval Japan was a feudal society characterized by a strict caste system.  The shōguns (also known as daimyō in later eras) resided at the very top of society as feudal lords.  The samurai ranked just below the daimyō in terms of status, but owed them fealty and military service.  In return the samurai were paid a wage (usually in the form of rice, although payments in coin became more common during the late feudal period).  Most samurai were also granted land and servants, as well as the right to arbitrarily strike down any commoner who compromised their honor!

This system worked well enough until the Sengoku, or Warring States period (1467 to 1600).  During this time the Muromachi shogunate was theoretically in charge.   But in reality the Muromachi had lost their grip on power, allowing the rise of local warlords.  Each of these daimyō warlords had their own loyal samurai army, which they used when jockeying with other warlords for political power.

As a result, the Sengoku period was a time of unrelenting violence, famine and misery.  Many samurai during this period became wandering rōnin after losing their masters in battle.  Rōnin samurai were given little respect in Japanese society because they often resorted to mercenary work or banditry to survive.

The Samurai during the Tokugawa Shogunate

In 1600 AD, the warlord Tokugawa Ieyasu defeated his remaining rivals at the Battle of Sekigahara.  This allowed him to finally unite all of Japan under his undisputed rule, bring the long-running Warring States period to a close.  The Tokugawa shogunate dominated Japanese political life for the next 260 years.  This period was no less transformative for Japanese samurai.

In place of constant combat and social chaos, came peace, increased commerce and widespread prosperity.  Many of the Tokugawa samurai transitioned from full time warriors into largely administrative roles.  They still needed to be battle ready, however, and were required by law to carry their trademark swords with them in public.  But this new, much more peaceful Japan called for precious little bloodshed.

During this period many samurai became government officials in one capacity or another.  The shogunate or local daimyō paid these samurai a regular stipend in either rice or coin.  But wandering samurai, or rōnin, were forced to find peaceful employment elsewhere.  The most talented opened dōjōs where they taught their swordsmanship techniques to paying customers.

Another exceptional aspect of the Tokugawa shogunate during this time was its policy of strict isolation.  Trade with the West was made illegal, with the sole exception of the Dutch, who could trade with the Japanese via the tiny island of Dejima off the coast of Nagasaki.  No other Western countries were allowed to trade or interact with the Japanese during this time.  And any Japanese citizen who went abroad was forbidden to return to his native land, on pain of death.

The samurai were stuck in a time warp.  Even as the rest of the world experimented with and perfected the use of gunpowder, Japanese samurai still trained relentlessly with their swords.  Swordsmanship remained surprisingly effective in the island nation because guns were illegal, with only select parts of the military establishment having access to outdated models (by international standards).  In Tokugawa Japan, samurai still dueled with swords while police battled bandits with antiquated bladed weapons.

 

Japanese Edo Era Tsuba for Sale on eBay

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The Samurai during the Bakumatsu Period

The comfortable days for the samurai of the Tokugawa shogunate began to unravel in 1853.  That was the year that American Admiral Matthew Perry led a squadron of U.S. warships into Edo (now Tokyo) harbor and demanded the Japanese open trade and diplomatic relations.  The implicit use of force backed Perry’s demands.  This was no idle threat either; the American fleet of four massive warships was laden with cutting-edge Paixhans guns and over 1,500 well-equipped troops.

Officials of the Tokugawa shogunate panicked.  They knew Japan’s coastal defenses were in a shambles and utterly incapable of defending the capital city – much less the rest of the nation – against an American naval bombardment.  The Tokugawa were also painfully aware of how antiquated the bulk of their samurai army was when compared to Western military forces.  After delaying for a number of months, the Tokugawa finally submitted to American demands.

Foreign people, goods and ideas soon flooded into Japan, setting off an existential cultural crisis in the island nation.  Suddenly the Tokugawa shogunate, which had ruled unchallenged for hundreds of years, was revealed to be weak and incompetent.  Samurai factions arose that demanded the Emperor be restored to power, rather than remain as a mere figurehead.  Others simply wanted the foreigners out, even if it meant war.  But a few forward-looking Japanese officials and scholars saw that the nation desperately needed to modernize if it was to avoid being colonized by the European powers.

This era, which was known as the Bakumatsu, was a period of social chaos, political intrigue and rapid cultural change.  Foreigners were assassinated on the streets of Edo by sword-wielding reactionaries with stunning regularity, as were Japanese administrators and intellectuals.  Yet, the Tokugawa shogunate was powerless to stem the internal dissent.  It was obvious that feudal Japan was coming apart at the seams.

It was during this dark time that one of the greatest samurai organizations of all time was born – the Shinsengumi.  This samurai police force was established to patrol the streets of Kyoto, maintaining order in the name of the shogunate.  Although widely celebrated in modern Japanese culture, the Shinsengumi was only active in Kyoto for a handful of years, from 1863 to 1867.  And the elite force did not long survive its expulsion from Japan’s imperial city, disbanding in 1869 after backing the losing side in the Boshin War.

 

Antique Japanese Kozuka & Kogatana for Sale on eBay

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The Boshin War and the End of the Samurai

When it finally arrived, the twilight of the samurai came with stunning swiftness.  The Japanese provinces of Chōshū and Satsuma formed an alliance in opposition to the central Tokugawa authority and instigated what became known as the Boshin War.  The rebels ostensibly strove to restore the authority of the Japanese Emperor, which they claimed the shogunate had unjustly usurped.  Although considerably outnumbered by the shogunate forces, the imperialist soldiers carried the latest weapons imported straight from Europe.

While their clashes spanned from January 1868 to June 1869, the results of the conflict were inevitable.  The Tokugawa army, largely relying on traditional samurai weapons and tactics, was repeatedly overwhelmed by the superior firepower of the modernized rebel forces.

 

Boshin War Samurai

A gathering of Satsuma samurai during the Boshin War to overthrow the Tokugawa shogunate, circa late 1860s.  Photo credit: Wikipedia

After the dissolution of the shogunate, the new imperial Meiji government wasted little time in implementing major reforms meant to modernize Japan.  However, this was an unwelcome development for many samurai, who had been subjected to something of a political bait and switch scheme.

Originally, the anti-Tokugawa imperialists fought under the pretext of reestablishing traditional Japanese values and institutions.  This was best summarized by the famous 1850s-1860s Japanese political slogan “Revere the Emperor, expel the barbarians.”  In this context, barbarians referred to Westerners (Europeans and Americans) and their foreign influence.  In effect, many Japanese equated the restoration of imperial power with a return to Japanese isolationism.

Many samurai found this uncompromising philosophy to be deeply attractive and enthusiastically threw in their lot with anyone rebelling against the weak and corrupt shogunate.  But once the Meiji Restoration occurred, these same samurai were dismayed to find out that the new government had no intention of recreating a traditional, by-gone Japan.  Instead, the Meiji government systematically dismantled the samurai class.

The first blow fell in July 1871, when the central government formally abolished the feudal system.  Although many of the Japanese han (provinces) had already been confiscated from the Tokugawa and their loyalist during the 1868 Boshin war, most remained in the hands of their hereditary daimyō.  This changed in the summer of 1869 when the rest of the daimyo were coerced into surrendering their domains to the Meiji government in exchange for being appointed as non-hereditary governors of their former lands.  By 1871 the Japanese government formally eliminated the han structure and the feudal traditions attached to them.

At this point, political change came with unrelenting speed.  In August 1871, the government promulgated the danpatsurei, or Cropped Hair Edict, which encouraged samurai to cut their distinctive top-knot hair style.

In 1873 the Meiji government took a monumental step towards displacing the samurai class by establishing a western-style, professional army.  This deprived the samurai of their traditional role as the nation’s exclusive military force.

The final indignities for the samurai came in 1876.  This was the year the central government in Tokyo passed two culturally earth shattering laws: the Sword Abolishment Edict, or haitōrei, and the Stipend Measure, or chitsuroku shobun.

In March 1876, the haitōrei outlawed the wearing of weapons in public, including swords.  Only the military and police were exempt from this law.  The samurai, who defined themselves via their swords, could now no longer advertise their identity publicly.

A few months later, in August 1876, all samurai stipends were mandatorily converted into government bonds.  This effectively cut-off the samurais’ salary and replaced it with a bond that only paid out 25% to 90% of their lost wages.

At this point, the samurai were no longer really samurai.  Their official military role had been eliminated.  Their once mighty feudal lords had been turned into paper-pushing governors who had little true authority.  The samurai could no longer wear their beloved swords or traditional top-knots.  And they weren’t even paid to be samurai anymore.

Many samurai accepted this demotion in social status with surprising equanimity.  After all, by the late Edo era a great number of samurai were functionally bureaucrats themselves, far removed from their warrior roots.  But a few die-hard samurai clung to the old ways and refused to accept their diminished status.

These remaining fanatics coalesced around a charismatic leader, Saigō Takamori.  In 1877, he led a final samurai rebellion against the central Meiji authority in the southern province of Satsuma.  At this point, the remaining samurai had little to lose as all their prerogatives had already been stripped away.

Although they fought valiantly, the Satsuma Rebellion was doomed to failure.  Many of the samurai refused to fight with rifles, but instead chose to do battle with their traditional weapons: swords, naginata and bows.  They believed the righteousness of their cause and indomitable warrior spirit would carry the day.

They were wrong.

The Meiji government’s army of conscript peasants, armed with modern rifles and trained in the Western style, defeated the rebels in a series of pitched battles between January and September of 1877.  Saigō Takamori, who is sometimes referred to as “the last samurai”, was cut down in battle and his remaining forces crushed.  The traditional Japanese samurai died with him.

 

Identifying Antique Samurai Sword Fittings

One important way to identify antique samurai sword mountings is to determine the metal used in their construction.  Tsuba, in particular, can be divided into two categories: iron tsuba and soft-metal (kinko) tsuba.  All other samurai sword fittings – fuchi, menuki, kashira and kozuka – were usually fashioned from soft-metal alloys.  This is because tsuba could potentially benefit from the structural strength imparted by iron, while other mountings were largely ornamental in nature.

Iron is a metal most of us are familiar with, so I won’t spend much time on it.  In contrast, the soft-metal (generally copper-based) alloys the Japanese used are really quite unfamiliar to most people.  So they will get the bulk of my attention.

The Japanese employed a number of different kinko alloys to impart a specific look or feel to a finished article.  Contemporary medieval metalworking in Western cultures, in contrast, took a completely different philosophical approach to finishing metals.  Instead of relying on a profusion of different alloys for aesthetic effect like the Japanese, Europeans used surface treatments like acid etching and plating to achieve various finishes.

 

Edo Era Fuchi & Kashira for Sale on eBay

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Shakudō

Shakudō is one of the classic Japanese metalsmithing alloys.  Shakudō is an alloy of between 1% and 10% gold, with the balance composed of copper.  However, the typical shakudō alloy contained 2% to 7% gold.  Because of the expense of gold, cheaper shakudō alloys will tend towards the lower end of that range.  Only the very wealthiest and highest status samurai could afford high quality shakudō mountings for their swords.

This unique alloy naturally develops an alluring velvety bluish-black or purplish-black patina over time.  But Japanese craftsman more commonly induced the prized patina immediately via an oxidizing paste called rokushō.  Historical references to shakudō appear as early as the Nara period (710 to 794 AD), but the first surviving examples of the alloy date from the 12th century.  In any case, shakudō is one of the most important alloys used in antique tsuba, fuchi, kashira, menuki and kozuka.

Shibuichi

Shibuichi is another important Japanese metal alloy.  It consists of anywhere from 15% to 70% silver, with the rest being copper.  The addition of silver to copper produces a wide range of subtle grays, from an intense, charcoal-gray for low silver content alloys to a light, powdery-gray for high silver content alloys.  In some instances, shibuichi was further mixed with a tiny percentage of gold (usually 1% or 2%) to achieve other minor color variations.

Shibuichi’s origins undoubtedly date back to Japan’s medieval era, although it was first noted in early 18th century records from the Tokugawa shogunate mint.  This unusual metal was widely used by skilled Japanese metalworkers to create very fine samurai sword fittings in the 18th and 19th centuries.

The Western equivalent to shibuichi is an alloy called billon, which was composed of copper with less than 50% silver.  But unlike shibuichi, billon was only used in medieval European coins as a debased silver alloy.

Yamagane

Another Japanese alloy, yamagane, was used exclusively in older, pre-Edo era days (before 1600).  This metal was crude, unrefined copper, more or less exactly as it came smelted from the mine.  Due to its origins, it was sometimes called “mountain metal”.

Yamagane was commonly used in kinko samurai sword fittings from the Kamakura (1185 to 1333 AD) and Muromachi periods (1333 to 1568 AD).  This is due to the fact that the technology to produce refined copper (suaka) was expensive and not widely known during those eras.  Being a naturally occurring alloy, there was no explicit, set formula for yamagane’s composition.  But it is a good bet that most yamagane is around 95% copper, give or take, with small amounts of zinc, tin, lead, silver and arsenic making up the balance.

Yamagane is a deep, rich brown color, sometimes with hints of gray.  However, it takes some experience to distinguish raw, yamagane copper from refined, suaka copper based on looks alone.  You can expect to encounter yamagane only rarely due to the scarcity of surviving pre-Edo era samurai sword fittings.

Shinchu

Shinchu is what we would call brass today – an alloy of perhaps 75% to 85% copper, with zinc rounding out the balance.  Sometimes lead was added too, probably to change the final patination effect.  Shinchu has been continuously used in Japanese metalworking since the Nara period (710- 794 AD).

Sentoku

Sentoku is roughly the equivalent of bronze, an alloy composed mostly of copper and tin, with a small admixture of zinc and lead.  This produced a yellow-brown metal that wasn’t as bright as shinchu, but was otherwise quite similar.

Silver & Gold

In addition to the above soft metal specialty alloys, antique samurai sword mountings often have decorations crafted from silver or gold.  In many instances, the precious metal was inlaid into the underlying base metal.  On other specimens, the gold or silver decoration was applied as thick wire or sheet that stood in relief.  In very rare instances, the entire piece was made from solid silver (or gold, although such examples are quite uncommon).

The next identification method I want to discuss is a craftsman’s signature.  While many high quality antique samurai sword fittings were signed, not all masters saw fit to sign their creations.  In fact, there are many more unsigned samurai sword fittings than signed ones.  I would also like to note that it is more common for a tsuba to be signed than other mountings.

Unfortunately, translating the signature on an old tsuba can be quite challenging for those of us who are not fluent in Japanese.  But once a signature has been deciphered, the tsuba can usually be attributed to a specific artistic school and perhaps dated.  Below is a helpful guide to tsuba signatures that I’ve pulled from JSSUS (The Japanese Sword Society of the United States):

 

Signatures of the Major Tsuba Schools

赤尾 Akao 明珍 明弥 Myôchin
赤坂 Akasaka 明弥 紀 Myôchin Ki
葵 Aoi 南蛮 Nanban
備前与四郎 Bizen-Yoshirô 奈良 Nara
武州 Bushû 西垣 Nishigaki
長州 Chôshû 信家 Nobuiye
大五郎 Daigorô 応仁 (應仁) Onin
越前 Echizen 尾張 透 Owari sukashi
林 Hayashi 早乙 Saotome
後藤 Gotô 志水 Shimizu
肥後 Higo 正阿弥 Shôami
平田 Hirata 秋田正阿弥 Akita shôami
平安城象嵌 Heianjô Zôgan 会津正阿弥 Aizu shôami
彦根彫宗典 Hikone Bori Sôten 備前正阿弥 Bizen shôami
法安 Hôan 古正阿弥 Koshôami
伊藤 Ito 京正阿弥 Kyô shôami
加賀 Kaga 庄内 Shonai
鏡師 Kagamishi 藻柄子宗典 Soheishi Sôten
加賀与四郎 Kaga-Yoshirô 典 Sôten
鎌倉 Kamakura 太刀金具師 Tachi Kanagu-shi
金山 Kanayama 太刀師 Tachi sh
金家 Kaneiye 天法 Tempo
甲冑師 Katchûshi 土佐明珍 Tosa Myôchin
記内 Kinai 土佐 Tosa
金工 Kinkô 刀匠 Tôshô
古美濃 Ko Mino 埋忠 Umetada
古刀匠 Ko Tôshô 柳生 Yagyû
京透 Kyô Sukashi 山吉 Yamakichi
美濃 Mino 山吉兵 Yamakichibei
水戸 Mito 与四郎 Yoshiro

 

Sometimes a samurai sword fitting will be engraved with a family crest, known in Japan as a kamon.  While a kamon will not tell you who made a piece, it will tell you who it was made for, which is almost as meaningful.  A kamon provides a direct link between an old sword fitting and the samurai who commissioned it.

Kamon were popular with samurai because they instantly communicated clan affiliation and social status to any onlooker.  But kamon were most often displayed on a samurai’s clothing.  Adding one as a decorative element to the katana was completely at the discretion of an individual samurai.

Attributing a samurai sword mounting’s kamon to a particular clan might also reveal the geographic origin of a specimen, which is a nice bonus for connoisseurs.  Unfortunately, relatively few antique samurai sword fittings used kamon as decorative motifs, making this method of identification somewhat less useful than it would first appear.  This website on Japanese heraldry might prove useful for looking up any kamon you come across.

Being able to accurately describe the design or decoration on antique samurai sword fittings is another invaluable skill for the collector.  The design choices made by the artisans tended to reflect traditional Japanese aesthetics.  Major themes included geometric designs, animals, insects, holy men, ritual objects, demons, warriors and scenes from nature or daily life.

Because these motifs were recycled again and again throughout Japanese history, it is difficult, if not impossible, to date a samurai sword mounting from its design alone.  Still, it is imperative for the collector to know what is being represented and its importance in Japanese culture.

 

Dating Antique Samurai Sword Fittings

Dating old samurai sword fittings is notoriously difficult.  Traditional materials, forms, decorative elements and smithing techniques were continuously utilized for several hundred years with little change.  This leaves collectors in a quandary.  In extreme cases, it can be difficult to tell the difference between a 17th century tsuba and an early 20th century one!

In spite of this obstacle, it is possible to make some broad assertions that can help the aficionado to date antique samurai sword fittings, especially tsuba.

First, and perhaps obviously, early mountings are much rarer than later ones.  Any material from before the start of the Tokugawa shogunate (circa 1600) is scarce.  Being primarily weapons of war, these Kamakura/Muromachi/Sengoku era tsuba were almost entirely functional in nature.  As a result, most (although not all) specimens were made from iron in simple egg, oval or round shapes.  Decoration of early iron tsuba was generally restricted to simple pierced geometric motifs.  In addition, it was not unusual for one or both of the kozuka hitsu-ana and kōgai hitsu-ana holes on either side of the central nakago-ana hole to be absent.

 

Old (Pre-Edo Era) Tsuba for Sale on eBay

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According to legend, the first soft-metal (kinko) tsuba were produced in the late 15th century by the famous artisan and founder of the renowned Goto school, Goto Yujo.  I would take this folklore with a grain of salt, however, as it is impossible to verify with any degree of accuracy.

The rise of the Tokugawa shogunate in the Edo era fundamentally changed the role of the samurai class in society.  As real battles faded into the past and peace became the norm, samurai sword fittings became more ceremonial or decorative in nature.  A high-ranking samurai’s tsuba or kashira became the perfect venue for him to advertise his wealth, social status and power.

Because of this, samurai sword mountings became increasingly lavish over the course of the Edo era.  This doesn’t mean that extravagant tsuba, fuchi or menuki weren’t produced early in the Edo period – only that opulent examples are more common in the 19th century, as opposed to the 17th century.  The bulk of genuine antique samurai sword fittings available in the marketplace today are from 18th or 19th century Edo Japan.

The fall of the Tokugawa shogunate and the subsequent destruction of the samurai class in the 1870s created a crisis for sword fitting makers.  Most went out of business as demand collapsed, but a few still managed to hold on.  These tenacious survivors continued producing small quantities of high quality goods throughout the Meiji, Taishō and Shōwa periods.

It can be exceedingly difficult to distinguish a 20th century tsuba from a 19th century Edo example.  However, more modern specimens will often display a precision or crispness that is generally lacking in older pieces.  It is important to note that most of the samurai sword fittings created in the post Edo era were cheap reproductions intended for the tourist market.  Relatively few high quality mountings were handmade by skilled artisans using traditional methods in the 20th century.

I would also like to briefly talk about the impact of World War II on the Japanese samurai sword industry.

After Japan lost World War II, Allied occupation commander Douglas MacArthur ordered all samurai swords to be confiscated and destroyed on the grounds that they symbolized Japanese military aggression.  Although this law was soon amended to preserve historically significant specimens, a large number of very fine, very old swords had already been dumped into Tokyo Bay or melted down for scrap.  Presumably, an equally large number of magnificent antique samurai sword fittings were lost at the same time.

This single event was probably one of the largest art purges of all time, albeit unintentional.

Happily, American servicemen in Occupied Japan were allowed to take some surrendered swords home with them as war trophies.  Due to this historical good fortune, many artistically important swords (and their mountings) were saved.  It also means that a disproportionately large number of fine old samurai swords reside in the United States.

 

A Buyer’s Guide to Antique Samurai Sword Fittings

When investing in antique samurai sword fittings, the primary criterion is always quality.  You want a piece made by a master, or at least a skilled journeyman.  Good, investable specimens will always be finely finished, with incredible attention to detail.  This is true regardless of whether they are made from iron or a soft-metal, like shibuichi.

Unlike many antiques, age is a secondary factor when collecting tsuba, fuchi, menuki, kashira and kozuka.  Quality trumps everything.  I would much rather own a superb mid 20th century tsuba than a poor quality example from the 15th century.

Look for specimens that have an even, intact patina.  The exact appearance of a good patina will vary depending on the specific metal alloy used.  Unfortunately, this knowledge can only be gained through experience (looking through a lot of online auction listings can help).

Conversely, avoid anything that has been harshly cleaned.  Cleaned examples will often have an unnatural appearance that doesn’t “fit” with the purported age of the piece.  In addition, the absence of an appropriate patina may indicate a modern forgery.

It is also wise to avoid tsuba and other sword fittings that are crude or poorly finished.  Many vintage (and modern) reproductions were cast because it was a cheap and easy production method.  However, these copies often exhibit unfinished seams, porous surfaces and generally bad workmanship.

Watch out for damaged pieces.  With iron tsuba, this generally takes the form of fire scale, cracks, pitting or excessive rust.  Damage to soft-metal (kinko) pieces is often due to botched cleanings or other mistreatment that leaves deep scratches or mechanical abrasions on the surface.  Also, never try to clean an antique samurai sword mounting yourself.  You are likely to strip its patina and damage it, permanently reducing its value and desirability.

Don’t be put off by small chisel marks that you might see around the central hole on some tsuba.  These marks are not damage.  They are called tagane ato (literally translated as “punch marks”) and were made to tightly fit a remounted tsuba onto a new sword.  In fact, tagane ato can be an indicator that a tsuba has seen real use and is genuinely old.  This clue isn’t foolproof, though; tagane ato can be faked.

 

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I would also like to note that most fake antique samurai sword fittings in circulation today originate from China.  Therefore, it is a cardinal rule to never, ever buy old Japanese swords or their paraphernalia from China!  You are almost 100% guaranteed to get a worthless reproduction.

Stick to buying exclusively from trustworthy dealers instead.  Many of these established dealers are located in Japan, but sell internationally via eBay.  Respected dealers from the United States and Europe also sell on eBay.

Prices for old samurai sword fittings can vary greatly depending on quality, age and materials.  All else being equal, you should expect to pay more for a tsuba made of shakudō or a precious metal, versus one made of iron, copper or some other base metal.

Old samurai sword mountings that are richly decorated will generally be more desirable and expensive than those that are plain.  One exception to this rule is very old, pre-Edo era tsuba, which can be quite pricy even with little in the way of decoration.

Good quality antique samurai sword fittings start at just over $100, although I have heard of one lucky buyer picking up a genuine Muromachi era iron tsuba for $20 on eBay!  There are many fine specimens available in the $200 to $400 range.  If you’re willing to spend $800 or $1,000, you can expect to score a superlative piece, like this signed Edo era tsuba from the Ishiguro School.  At $1,500 or $2,000 you are easily into museum quality territory.

I find it amazing that you can hold a centuries old piece of the samurai legacy in your hands for only a couple hundred dollars or less.  It boggles the mind that these cultural treasures have somehow been overlooked in our modern age.  However, I don’t expect this opportunity to last forever.  One day these jewels of old Japan will be recognized for what they are, and prices will be much higher when that day comes.

 

Read more in-depth Antique Sage Japanese antiques investment guides here.

 -or-

 Read more in-depth Antique Sage militaria investment guides here.


Platinum – The Other Monetary Metal

Platinum - The Other Monetary Metal
A one troy ounce platinum bar struck by the respected Swiss precious metal refiner Valcambi SA.  This unique, gray-white metal is currently more undervalued than gold, silver or palladium and represents an intriguing investment possibility for the unconventionally minded.

Platinum is the world’s most undervalued monetary metal at the moment – a contrarian investor’s dream come true.  Read on to discover what makes this overlooked precious metal so special.

 

Platinum’s Physical Properties

Platinum has a unique, grayish-white metallic color.  It isn’t as bold as silver, but instead exudes a sophisticated, yet understated, sensibility.  Many people find it mesmerizing, particularly when skillfully employed in jewelry.

With a density of 21.45 g/cm3, platinum has one of the highest specific gravities of any element on the periodic table.  This means that a cube of the stuff weighs more than 21 times as much as an identically-sized cube of water.  Platinum even bests the density of gold (19.3 g/cm3), which is extraordinary given the yellow metal’s freakishly high specific gravity.  And the gray-white metal is over twice the density of silver (10.49 g/cm3).

Platinum also possesses all the desirable attributes common to the other precious metals, such as ductility, malleability, reflectivity and non-toxicity.  In addition, platinum is a very strong and tough metal, making it perfect for demanding industrial applications or jewelry, where it exhibits very little wear loss over time.

Platinum is also notable for its extremely high melting point, only succumbing at 1768 °C, or 3214 °F.  For reference, a typical house fire reaches about 590 °C (1100 °F), while a Bunsen burner maxes out at around 1,400 °C (2550 °F).  Platinum requires highly specialized equipment to melt, which is why the technology to successfully refine its ores weren’t developed until the 18th century.

In addition, this incredibly versatile metal has striking catalytic properties.  A catalyst is any substance that speeds up a chemical reaction without being consumed by it.  In this case, platinum – along with its sister element palladium – has an intriguing affinity for hydrogen at the molecular level.  This makes it quite useful in a myriad of industrial applications.

The gray-white metal is also exceedingly corrosion resistant.  Platinum is impervious to most corrosive household chemicals, including bleach, chlorinated water and table salt.  In contrast, common metals such as copper, brass, aluminum and steel are readily attacked by these compounds.  Even silver won’t survive them for long.

About the only chemicals that will attack platinum are hot aqua regia (a combination of two extremely strong acids – nitric and hydrochloric – which is notorious for being able to dissolve gold), certain highly corrosive halogen gases (i.e. elemental fluorine, chlorine and bromine) and molten caustic soda (sodium hydroxide – a very strong alkali).

Suffice it to say that if you find your platinum is corroding, there is a very good chance that everything around it has already been dissolved, burned or otherwise destroyed.

 

Platinum’s Uses

All of these wonderful physical properties make platinum a very desirable material with a wide range of real world applications.

For example, its number one use is in vehicle catalytic converters.  When finely dispersed in a car’s catalytic converter, the metal helps to fully oxidize poisonous carbon monoxide gas and any unburned hydrocarbons, while simultaneously decomposing noxious nitrogen oxide compounds.  These undesirable gases then leave the car’s exhaust as harmless carbon dioxide, water and nitrogen.

Platinum is also highly prized in jewelry making.  The lustrous, gray-white metal has a subtle presence that can’t be achieved with traditional gold or silver.  In addition, its phenomenal strength and long-wearing qualities make it, in some respects, the perfect jewelry metal.

Another bonus of platinum jewelry alloys is that they are much purer than your typical gold alloy.  For example, most platinum jewelry alloys are either 90% or 95% fine.  The metal’s unique physical properties allow it to retain its hardness and strength in this near-pure form.  This compares quite favorably with gold, which must be heavily alloyed to improve its strength and wear characteristics.  Most gold jewelry ranges in purity from a paltry 37.5% fine (9 karat gold) to a much-improved, but still inferior 75% fine (18 karat gold).

Platinum has a variety of important industrial uses as well.  It is used to coat the platters in computer mechanical hard drives.  It is also vital in glass-making, where it is employed in high-temperature crucibles that hold molten glass.  The resulting high quality glass is typically used in expensive end products like watches, laptops and cell phones.

The metal’s properties as a catalyst are invaluable to the chemicals industry.  It has been vital to the bulk synthesis of nitric acid for well over a century.  Oil refineries deploy platinum coated catalysts to help crack crude oil into usable gasoline distillates.  As long as we need gasoline for our cars or nitrogen-rich fertilizer for our fields, we will need platinum to help us make it.

The precious gray-white metal has a myriad of other more minor industrial applications as well.  These include biomedical uses (it is used extensively in cancer treatments) and fuel cells (it efficiently catalyzes oxygen and hydrogen into water, releasing electricity as a by-product).

Platinum is also commonly fabricated into laboratory crucibles because of its corrosion resistance and ultra-high melting point.

 

The History of Platinum

Although platinum was known to some Pre-Columbian cultures of South America, the Spaniards who colonized those lands in the 16th century thought little of the strange, white metal.  It wasn’t until the mid 18th century that platinum was finally recognized as being a chemically distinct element.  However, the fact that the native metal almost always occurred as an alloy with other platinum group elements confounded scientists for many decades.

In 1783, the French chemist Francois Chabaneaus pioneered a method for working with the new wonder metal.  Funded by the Spanish King Charles III, Chabaneaus’ technological breakthroughs were a state secret.  As a result, the world’s first commercial platinum foundry was established in Spain, ushering in the Iberian country’s so-called “platinum age”.

During the period from 1786 to 1808, it is estimated that Spain produced as much as 18,000 troy ounces of wrought platinum accessories, plate and silverware, including an extravagant 55 ounce chalice for Pope Pius VI.

The 18th century French king Louis XV, tired of being surrounded by palaces dripping with gold and silver, purportedly remarked that platinum was the only metal fit for a king.

In 1889, the International Bureau of Weights and Measures (IBPM) in France defined the official kilogram standard as a perfectly formed cylinder of 90% platinum and 10% iridium.  Platinum was chosen to fabricate the kilogram prototype because it is a nearly immutable substance that does not corrode, oxidize or otherwise change with the passage of time.  Today, 6 copies of this immensely important prototype weight reside in the IBPM in Sèvres, France, all of them composed of the same platinum-iridium alloy.

Although it is idle speculation, I strongly suspect that if the modern Olympic Games had been resurrected a couple decades later than its original 1896 debut, the first place winner would be awarded a platinum medal today instead of a gold medal.  But the precious white metal had not yet penetrated popular culture in the 1890s.

The 1920s, however, ushered in a new era for platinum as the must-have “white look” metal in Art Deco jewelry.  The trend for white metal jewelry lasted for almost two decades and spawned the production of cheaper substitutes, most notably white gold.

In 1931, the Frank Capra film “Platinum Blonde”, starring Jean Harlow, introduced the term for a silvery-blonde bombshell to the English lexicon.  The idea of a woman with a stunningly blonde mane is so seductive that many women still insist on dying their hair platinum blonde to this day.

In 1953, Eartha Kitt released the classic Christmas-themed song “Santa Baby“, which favorably references the precious white metal.  In the song, Eartha pleads in a sultry voice, “Santa honey, one thing I really do need, the deed…to a platinum mine”.

Starting in 1976, the music industry introduced the platinum album, which certifies that an artist (in the U.S.) has sold 1 million copies of an album.  This is twice as much as a gold album, which is awarded after the sale of only 500,000 copies.

By the 1980s, platinum-branded credit cards were rolled out en masse.  Originally, credit cards were issued in gold and silver varieties, with the former being more prestigious than the latter.  But once platinum cards were released, they displaced gold credit cards as “the best”, while silver credit cards were largely discontinued.

 

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The Extreme Rarity of Platinum

Platinum is an incredibly rare precious metal.  Its estimated abundance in the earth’s crust is only between 3 and 5 parts per billion, which is similar to the estimated crustal occurrence of gold.

However, these statistics are somewhat misleading.  In reality, platinum is much more difficult to find in economically feasible deposits than gold.  In fact, over the ten year period from 2008 to 2017, gold was mined at a rate 15 times higher than platinum.  In other words, platinum is 15 times rarer than gold!

Platinum’s mine supply imbalance with silver is even more extreme.  There have been 131 ounces of silver mined over the last 10 years for every ounce of platinum mined.  That ratio rises to 141 to 1 if you only look at the last 5 years.

Nor are we mining significantly more platinum than in years past.  Platinum mine production in 2017 was 200 metric tons – about 6.4 million troy ounces.  But this is almost identical to the ultra-rare metal’s mine production of 205 metric tons in 2003.

Mine production has clearly stagnated, which is mostly attributable to the fact that the price of platinum has not kept up with its increasing production costs.  Right now about 70% of the world’s platinum is mined in South Africa.  But the South African mining industry has been caught between persistently rising labor costs and declining reserves as decades old mines are slowly being exhausted.

A multi-year period of weak prices has completed the disaster, creating an industry-wide catastrophe for South African platinum miners.  As a result, investment for the exploration and development of new mines in the country has ground to a near halt.  Many South African mining companies have reacted to these weak business conditions by reducing capital expenditures, laying off workers and closing mines.

For example, major South African platinum producers Lonmin and Implats are both cutting production and laying off miners.  Implats is closing 5 shafts and shedding 13,000 jobs over the next 2 years.  Meanwhile, Lonmin’s latest corporate presentation reads like a funeral dirge as the company desperately tries to stay solvent until its planned acquisition by competitor Sibanye-Stillwater in late 2018.

 

Platinum as a Monetary Metal

Platinum is not only a noble metal, but also the most recognizable of the platinum group elements.  And given its illustrious history, extreme rarity and superlative physical properties, I find it odd that some people don’t accord platinum a status on par with the other precious metals.

In my opinion, it is clearly as much a monetary metal as silver or gold.

I don’t believe it is possible to talk about precious metals and their monetary function in the 21st century without including gold, silver and platinum in the discussion (and probably palladium as well, but that is another topic).  Yes, platinum is a renowned jewelry metal and has many industrial uses, but it is also fundamentally a monetary metal.

In fact, platinum was used in circulating coinage between 1828 and 1845 in Czarist Russia.  Many of these beautiful early Russian coins have survived the intervening 180 odd years intact and are highly sought after by collectors today.  When they do come up for sale, you had better get out your checkbook though, because you can’t touch one for less than about $2,000.

Although Russia’s initial monetary experiment with platinum didn’t last very long, it was an important waypoint on the precious metal’s journey into the world’s cultural conscience.

During the early 1980s Engelhard, Johnson Matthey and other major bullion fabricators began to issue smaller platinum bars intended for individual investors.  I believe that this event marks the exact moment when platinum finally, indisputably arrived as a monetary metal.

Not wanting to be left out of the action, government mints also began issuing platinum bullion coins targeted at retail precious metal investors.  The first of these was the Isle of Man Platinum Noble in 1983.  Canada soon released the Platinum Maple Leaf in 1988, while Australia began striking its Platinum Koalas in the same year.  The U.S. followed up with the American Platinum Eagle in 1997.  The British Royal Mint arrived late on the scene with its Platinum Britannia bullion coins in 2018.

Today, platinum is often referred to as “rich man’s gold” – a nod to the fact that it has almost always been more expensive per ounce than gold since the beginning of the 20th century.

 

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How Undervalued Is Platinum Today?

The platinum-gold ratio is a time-honored way of calculating the relative value of the gray-white metal compared to gold.  This number measures how many ounces of gold it takes to purchase a single ounce of platinum. Over the 30 year period from 1988 to 2017, the platinum-gold ratio has averaged 1.34.  But as of December 2018 it is trading at only 0.67, which is half the 30 year average.  In fact, the platinum-gold ratio is currently the lowest it has been in more than 100 years, signaling that the gray-white metal is extraordinarily undervalued versus gold today.

The platinum-silver ratio also shows the precious white metal to be substantially undervalued, although not quite to the same degree suggested by the platinum-gold ratio.  Right now the platinum-silver ratio sits at 58, which is close to a 35 year low.  This ratio has averaged 88 over the past 30 years, giving platinum plenty of room to run.

As discussed earlier in the rarity section of this article, platinum is currently trading below its cost of production in South Africa.  It is estimated that average South African mine production costs hover in the $900 to $1,000 range, substantially higher than the $800 spot price.  While this situation can linger for some period of time, it cannot persist forever.  At some point, declining South African mine production will constrain supply, boosting the price of the unique metal.

Platinum prices have been quite volatile, booming and crashing twice in the last 15 years.  The first time was during the 2008 Financial Crisis, when prices plummeted by more than 60%.  A lot of this loss was attributable to the unsustainable run-up to $2,000 an ounce during the 2007-2008 commodities boom.  So the metal went from a period of extreme industrial demand to one of low industrial demand in just a few months, which decimated the price.

More recently, prices peaked at more than $1,800 an ounce in 2011, only to grind inexorably lower over the next several years.  Right now platinum is trading for less than half its 2011 peak – a trend largely driven by reduced demand for auto catalysts, which constitute approximately 40% of total platinum demand.

I think the metal’s price volatility has scared off a lot of investors who would otherwise have gravitated towards the rich man’s gold.  However, this represents a great investment opportunity, as low prices are the time to buy, not sell.

 

The Bearish Investment Case against Platinum

Let’s talk about auto catalysts for a minute.

When precious metal or commodity investors express a bearish opinion on platinum, their argument almost always revolves around declining auto catalyst demand.  But in order to understand this argument, we must first understand how platinum group metals are used in automobile catalytic converters.

For our purposes, there are three main classes of vehicles that we are concerned with.  The first employ gasoline powered engines.  These predominate in average households, where passenger vehicles like sedans, mini-vans, hatchbacks, sports cars and SUVs are the norm.

The second type is diesel powered vehicles.  This includes most industrially-oriented vehicles, such as heavy-duty pick-up trucks, tractor trailers, dump trucks, box trucks and farm equipment.  However, it is also important to note that there are some diesel passenger vehicles, primarily in the European market.

The third category of cars is electric vehicles, or EVs.  These are cars powered by batteries that plug into a charger and do not consume liquid, petroleum-based fuel at all.  Because of this, they don’t use catalytic converters.  Tesla cars are probably the brand most associated with technologically cutting-edge EVs.

So here is how all of this applies to the platinum group metals.  Cars that have internal combustion engines run on either gasoline or diesel.  These vehicles need catalytic converters in order to eliminate pollutants, like NOx and CO, in their exhaust.

Platinum can be used in both gasoline and diesel engines, while palladium is only effective in gasoline engines.  Therefore, all diesel engines in existence heavily rely on platinum-rich catalytic converters.  Gasoline combustion engines can use either platinum or palladium.

This sets up a substitution effect.  If the price of platinum gets too high, auto manufacturers can switch over to palladium for their gasoline-powered auto catalysts.  If palladium becomes too pricey, they can switch back to platinum.

This isn’t just a theoretical concern for auto producers, either.  They have switched back and forth between the two platinum group metals several times over the past two decades.  For example, in the mid 1990s car companies largely adopted palladium because it traded at only $150 an ounce at the time versus $450 for platinum.

But then palladium experienced a debilitating bubble around the year 2000, with prices spiking to over $1,000 an ounce.  This prompted these same car companies to switch back over to platinum.

More recently, auto makers went back to palladium in the late 2000s, after platinum rose to over $2,000 an ounce in 2008.  They have been using palladium ever since, despite the fact that platinum is now cheaper than palladium by over $600 an ounce.

The reason that auto companies haven’t switched back to platinum for gasoline catalytic converters yet is because there are significant retooling costs associated with the change.  So they have to be really, really sure they want to make the switch before they commit to it.

But it is clear that if either platinum or palladium trades at a large discount to the other for a prolonged period of time, then the less expensive metal will widely displace the other in gasoline catalytic converter production.

A big part of platinum’s problem is negative sentiment.  Much of this has been driven by auto giant Volkswagen’s disastrous diesel emissions scandal.  In 2015 it was discovered that Volkswagen was cheating on its diesel emission tests.  This not only destroyed Volkswagen’s “clean diesel” reputation overnight, but also gave the entire diesel engine industry a black eye.  Suddenly, diesel engines were seen not as the future of clean automobiles, but as an embarrassingly dirty technology to be replaced as quickly as possible by better alternatives.

Electric vehicles are largely seen as that better alternative.

According to the International Energy Agency, EV ownership is projected to increase from 3 million vehicles in 2018 to 125 million by 2030.  Platinum bears believe that this massive increase in EV sales will lead to persistently declining demand for traditional internal combustion powered vehicles.

However, it is my opinion that the rise of electric vehicles is overblown.  The widespread consumer adoption of EVs faces it own technical challenges.  For example, a shortage of the metal cobalt, which is a key ingredient in the lithium batteries used in electric vehicles, could hobble its future growth prospects.

It is probable that we will only see modest EV penetration in the auto market over the next couple decades.  Instead, I think it is far more likely that the market will be dominated by hybrid vehicles, like the Toyota Prius, which combine a relatively small battery pack with a low-displacement, conventional gasoline engine.  However, because they still retain a combustion engine, hybrid cars require a catalytic converter.

Even if I’m wrong and EVs do come to dominate the passenger vehicle market, it will take many decades to come to pass.  In a worst case scenario, the rise of EVs will have almost no impact on platinum demand anyway.  This is because very little platinum is currently used in gasoline catalytic converters, as most of that market is dominated by palladium.

Platinum’s unassailable auto niche is diesel engines for commercial vehicles, which faces no realistic competition in the foreseeable future.  This is in spite of outlandish announcements like Tesla’s semi truck – an all electric tractor trailer that can supposedly haul up to 40 tons of freight for 500 miles.  The head of Daimler’s truck division agrees with my skeptical assessment of Tesla’s prototype electric truck, saying that:

“If Tesla really delivers on this promise, we’ll obviously buy two trucks – one to take apart and one to test.  …but for now, the same laws of physics apply in Germany and in California.”

 

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The Bullish Investment Case for Platinum

We’ve already talked about the bear case for platinum, which more or less revolves around falling auto catalyst demand.  But let’s change gears for a moment and consider the bullish investment thesis for the precious metal.

Put quite simply, platinum has everything other than auto catalysts going for it.  I’ve already mentioned these points earlier, but I will summarize them here.

The gray-white metal is incredibly rare – much rarer than gold and insanely rare compared to silver.

Not only is it priced at multi-decade lows versus both gold and silver, but is also trades below its long-term cost of production.

Platinum is incredibly useful in modern industrial applications.  If oil is widely considered the world’s most indispensable commodity and silver a close second, then platinum ranks third with its breathtaking versatility.

Platinum jewelry is unsurpassed in its strength, toughness and corrosion resistance.  The well-to-do have coveted jewelry made from the lustrous gray-white metal for over a century now.  And with good reason too – its properties cannot be duplicated by any other jewelry material known to man.

The final piece of the puzzle is platinum’s unassailable position in the public imagination.  It is widely viewed as the most valuable of the precious metals, even if its current price does not reflect this reality.

Given all of these positives, I believe it is only a matter of time until the oversupply in the platinum market clears and prices skyrocket once more.  Platinum for anything less than $1,000 an ounce is an absolute steal.  But once it rises above that level, chances are that you will never see it again in your lifetime.

 

Read more in-depth Antique Sage bullion & gemstone investment guides here.


Certified Morgan Silver Dollars – A Beginner’s Investment Guide

Certified Morgan Silver Dollars - A Beginner's Investment Guide
This attractively rim-toned 1888 Morgan silver dollar resides in a desirable 1990s-vintage NGC “Fatty” slab with an MS-64 designation.  With their prices currently near 30 year lows, high-grade certified Morgan silver dollars represent a compelling numismatic option for the more adventurous tangible asset investor.

The Morgan silver dollar is legendary, standing alone as the United State’s most iconic coin.  It is undoubtedly the world’s most widely collected coin, and with good reason.  These extraordinary coins embody both the American love of hard currency and the lore of the Old West, where they circulated widely during an age of cowboys, prospectors and gunfighters.  The Morgan silver dollar’s classic design – the wreathed head of the personification of Liberty on the obverse and a majestic eagle with its wings proudly outstretched on the reverse – render it perhaps the most instantly recognizable coin on earth.

Not content simply to look pretty, the Morgan silver dollar is also a massive coin, with a diameter of 1.5 inches (38.1 mm) and a thickness of 0.0945 inches (2.4 mm).  They are so large that they were nicknamed “cartwheels” because of their tendency to roll on their edge when casually tossed on a table or bar counter.

Morgan silver dollars weigh an impressive 0.8594 troy ounces (26.73 grams) and are composed of 90% silver and 10% copper.  This gives every Morgan silver dollar a net silver content of 0.77344 troy ounces (24.06 grams) – more than 3/4 of a troy ounce.

The Morgan silver dollar was struck between 1878 and 1904, with a single encore year in 1921.  The early years of its production overlapped with the final years of the U.S. trade dollar, a large silver coin specifically minted to compete with foreign silver trade dollars for commercial dominance in East Asia.  At this point, every pre-1921 Morgan silver dollar is easily more than a century old, with the very oldest examples a stunning 140 years of age.

The origins of the famous silver dollar began with a piece of 1878 legislation known as the Bland-Allison Act.  This law was a reaction to the Panic of 1873, a deep recession that prompted a public outcry to increase the money supply by legalizing the free coinage of silver (the U.S. was on a de facto gold standard at the time).

The Bland-Allison Act did not allow for the unlimited conversion of silver bullion into silver dollars.  But the law did stipulate that the U.S. Treasury would purchase anywhere from $2 to $4 million worth of silver every year from mines in the Western U.S. and turn it into silver dollars.  In conjunction with this, Bland-Allison authorized the issuance of silver certificates for the first time in U.S. history.

As a result, huge quantities of Morgan silver dollars were struck over the lifetime of the series.  According to official U.S. Mint records, more than 650 million of the coins were struck (although over 270 million were later melted down).  Most of these coins spent their lives in vault storage as backing for the silver certificates that were issued as part of the Bland-Allison Act.  This helps explains why high quality Morgan silver dollars are readily available to collectors at such reasonable prices today.

Most of the high grade Morgan silver dollars available in the numismatic marketplace today have been third-party certified, or slabbed.  This means the coins have been submitted to and evaluated by an independent grading company, which then encapsulates them in tamper-resistant, hard plastic cases.  The two oldest and most respected third-party coin grading companies are PCGS (Professional Coin Grading Service) and NGC (Numismatic Guaranty Corporation).

 

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Third party certification transformed the coin industry almost overnight after its introduction in the mid 1980s.  Before the development of slabbing, over-graded, harshly cleaned and other problem coins were common in the numismatic community.  After the establishment of PCGS in 1986 and NGC in 1987, certified coins of the same grade and type began to be treated as semi-commodities.  This meant that coin dealers trusted the grading services enough to buy and sell coins based primarily on their assigned grades.  This tightened bid-ask spreads and streamlined transactions among coin professionals.

I want to point out that you will occasionally come across coins graded by services other than NGC or PCGS.  Some of the more commonly encountered companies are PCI (Photo-Certified Coin Institute – now defunct), ICG (Independent Coin Grading) and ANACS (American Numismatic Association Certification Service).  However, while these firms might have their niches, their slabs are generally less trusted and not as widely accepted in the numismatic world.  Only PCGS or NGC slabs should be considered by those wishing to seriously invest in certified Morgan silver dollars.

Yet another third party grading service I want to mention is CAC (Coin Acceptance Corporation).  This company is different from the other grading firms because it does not encapsulate raw (uncertified) coins.  Instead, CAC exclusively accepts previously slabbed NGC and PCGS coins for evaluation.  Coins that CAC believes are conservatively-graded receive a small, green oval sticker or “bean”, while coins thought to be under-graded get an oval gold sticker.  CAC does not sticker over-graded or average-graded coins.

Due to the fact that they are only applied to coins already graded by NGC or PCGS, CAC certifications can be thought of as a double guarantee.  As a result, green CAC stickers are highly sought after by Morgan silver dollar investors and collectors, giving these coins a healthy price premium over non-CAC stickered examples.  Gold CAC stickered coins are even rarer and bring commensurately higher prices.

The greatest change that standardized third-party grading brought to numismatics was the possibility of using coins as an investment vehicle.  Collectors and investors could finally be assured that the slabbed coins they purchased were not only completely genuine, but also conformed to their stated grade.  Morgan silver dollars, with their impressive size, iconic design and rich historical context, were perfectly matched to the groundbreaking development of third-party certification.

 

PCGS Morgan and Peace Dollar Index (1970 to 2018)

PCGS Morgan and Peace Dollar Index (1970 to 2018)

Photo Credit: PCGS

But a funny thing happened on the way to investment nirvana.  As you can see from the graph above, high grade Morgan silver dollars are more or less the same price in 2018 as they were in 1996, 1994 and 1985.  Now, there are two ways to interpret this situation.  One is that certified Morgan silver dollars are terrible investments and no one should ever buy them in the hopes of making money.  I believe this analysis is shallow and excessively facile.

Instead, I subscribe to another theory – that Morgan silver dollars, along with most slabbed U.S. coins, experienced a massive asset bubble in the late 1980s and then spent the next 30 years slowly working off those price and inventory excesses.  This bubble hangover was also compounded by the general underperformance of tangible assets during that period against a backdrop of distracting stock market bubbles.

Making money in coins works much the same way that it does in any other asset class – buy low and sell high.  And it is difficult to argue that prices for mint-state certified Morgan Silver Dollars aren’t ridiculously low right now.  In fact, the only other assets I can think of that currently trade for the same prices they did 30 years ago are all fellow 1980s bubble refugees – silver bullion, Japanese stocks and white diamonds.  Slabbed Morgan silver dollars are sitting in very exclusive company.

You can currently buy common-date MS-63 certified Morgan silver dollars between $50 and $75 each.  Superb MS-65 specimens start at just over $120.  These are exceptionally low prices for such iconic coins in excellent states of preservation.  Better yet, the prices are low enough that almost anybody can afford to invest.

 

PCGS & NGC MS65 Certified Morgan Silver Dollars for Sale on eBay

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Let’s talk for a moment about coin grading.  According to the industry standard Sheldon Grading Scale, coins can be assigned a numerical grade ranging from MS-1 to MS-70.  MS-1 represents an almost worn-smooth slug, with little detail remaining, while MS-70 is a theoretically perfect coin, with no wear or blemishes of any kind, even under magnification.  Because most coins sent for third-party certification are higher grade specimens, the uncirculated grades – MS-60 to MS-70 – will be our primary focus.

Due to the fact that many Morgan silver dollars sat in canvas bags in vaults for most of their lives, there are a relatively high number of uncirculated specimens in existence.  It is estimated that there may be as many as 50 million mint state Morgan silver dollars still around (excluding the high population 1921 date).  This might seem like a massive number, but there are some mitigating factors.

First, if every one of the 125 million households in the United States decided they wanted to own a single uncirculated Morgan silver dollar, there wouldn’t even be enough coins for half of them.  And this ignores the possibility that overseas coin collectors or investors might want to own a tangible piece of the American Old West.  As you can see, 50 million coins don’t go nearly as far as you might think.

Second, although there are many surviving mint-state Morgan silver dollars, most of them are in lower MS-60 to MS-62 condition.  This is because Morgan silver dollars were transported and stored in $1,000 face value canvas sacks, each of which weighed nearly 59 pounds (27 kilos).  The silver dollars in these bags jingled and rattled against each other endlessly, leaving them heavily marked.

While technically uncirculated, MS-60 to MS-62 Morgan silver dollars are, with few exceptions, ugly coins.  They may suffer from distracting bag marks, unattractive hairlines or obvious scuffs and rim nicks.  MS-60 to MS-62 uncirculated coins generally lack eye appeal.  And, as we will see, eye appeal is one of the most important attributes of an investment quality coin.

Once we step up to MS-63 coins, the situation changes dramatically.  Suddenly we are presented with a coin that may still possess much of its original mint luster or have pleasing toning.  It will still have visible marks, but they will not be nearly as visually disagreeable as those found on MS-60 to MS-62 specimens.  MS-63 certified Morgan silver dollars can be beautiful, desirable coins.

In fact, if you are hunting for scarcer date or mint silver dollars and cannot afford them in MS-63 or higher grades, I recommend that you skip over acquiring MS-60 to MS-62 specimens entirely and drop down to AU-55 or AU-58 coins.  Why?  Because AU-55 and AU-58 coins are often extremely attractive, with great eye appeal.  Their only drawback is that they are technically circulated, with a trace of wear on the highest points of the design.

Near the top end of the grading spectrum sit MS-65 certified Morgan silver dollars.  These coins take all the good qualities of MS-63 examples and supercharge them.  They have fewer hairlines or marks, and those they do have are not in obvious areas, like Liberty’s cheek.  They often possess superb original mint luster, which is sometimes referred to as “blast white”.  Slabbed MS-65 Morgan silver dollars are as good as it gets before you ascend to the truly exceptional (and exceptionally expensive) MS-66 grade and above.

For those who do not have the budget for MS-65 certified Morgan silver dollars but don’t want to descend to MS-63 territory, I find that MS-64 examples are often a good compromise between eye appeal, condition, and pricing.  Slabbed MS-64 Morgan silver dollars begin at around $65 for common date coins.

 

PCGS & NGC MS64 Certified Morgan Silver Dollars for Sale on eBay

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Of course, there is more to certified Morgan silver dollars than just their grade – eye appeal is paramount.  Coins with a superior strike, blazing original mint luster, rainbow toning or proof-like surfaces will look better than coins that do not have these attributes.  As a result, NGC and PCGS slabbed Morgan silver dollars with exceptional eye appeal will always sell for more money than average coins, even those that are technically in the same condition.  As the old numismatic saying goes, buy the coin, not the holder.

Highly coveted designations sometimes seen in certified Morgan silver dollars are proof-like (PL), deep proof-like (DPL) and deep mirror proof-like (DMPL).  These are regular, business strike coins that randomly came from the mint with mirrored backgrounds and frosted devices, much like a true proof coin has.  The contrast between the finish of the flat fields and the raised devices creates a highly desirable cameo effect.

The PL, DPL and DMPL designations awarded by PCGS and NGC are all highly coveted.  The only differentiation between the three designations is one of magnitude, with PL having the least cameo effect and DMPL having the greatest cameo effect.

I feel compelled to give some words of warning to anyone intent on purchasing proof-like certified Morgan silver dollars.  First, some less scrupulous sellers on auction sites (like eBay) characterize their coins as being some variation of proof-like in their listing title or description, without the coins actually having been designated as such by PCGS or NGC.  If a coin doesn’t have PL, DPL or DMPL clearly printed on the NGC or PCGS holder, then it isn’t proof-like (although it may still be very attractive)!

And while proof-like Morgan silver dollars can be stunningly beautiful, lower grade uncirculated issues, including many MS-63 proof-like coins, often don’t look that great.  This is because the flat, mirrored fields of a proof-like silver dollar accentuate any marks on the coin, making it appear worse than its actual grade.  Because of this, many dedicated Morgan silver dollar collectors only stick to higher grade uncirculated proof-like coins, which are considerably more expensive.

Pricing for proof-like certified Morgan silver dollars starts at just over $100 for common date MS-63 examples and escalates quickly for better date coins in higher conditions.

 

PCGS & NGC Proof-Like Certified Morgan Silver Dollars for Sale on eBay

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I would like to note that serious silver dollar collectors and investors should avoid coins dated 1921 (unless you need that specific date to complete a set, of course).  That is because the coins in this singular year were struck to excess.  Over 86 million 1921 Morgan silver dollars were minted in aggregate at the Philadelphia, Denver and San Francisco mints, far in excess of any other year of production.  In addition, because few of these coins circulated, mint state examples are quite common, with an estimated 10 to 15 million specimens still extant.

The sole exception to this advice would be the so-called “Zerbe Proof” or “Zerbe special strike” 1921 Morgan silver dollar.  This was a custom strike, proof-like coin that was purportedly made to satisfy the request of the numismatist Farran Zerbe in the year 1921, as no official proofs were struck with that date.  It is believed that only 150 to 200 of these specially struck coins were produced, making them quite rare today.  Prices start in the mid thousands for low quality uncirculated Zerbe Proofs and rise quickly as condition improves.

Another factor to keep in mind when looking to collect or invest in certified Morgan silver dollars is toning.  Toning is actually the early stages of tarnish on a coin, but it can be stunningly beautiful under certain circumstances.  A toned coin can exhibit a rainbow of colors, including steel blues, golden oranges, delicate violets and sea greens, among others.

However, a toned coin can also display a palette of distinctly undesirable shades, such as mottled browns, spotty blacks or dull grays.  Morgan silver dollars that are attractively toned possess tremendous eye appeal, boosting their value over non-toned coins of the same grade significantly.  Of course, by the same token an ugly or unattractively toned specimen will usually sell for a discount compared to an un-toned coin.

Because of the premium that attractively toned coins can merit, some less-than-honest people have attempted to artificially tone silver dollars in their possession before reselling them.  Therefore, I recommend that anyone looking to collect or invest in toned Morgan silver dollars stick exclusively to coins that have been certified by NGC or PCGS.  These third-party grading services will refuse to certify any coin that they deem to have been artificially toned or otherwise doctored.

Pricing for toned certified Morgan silver dollars varies considerably depending on the eye appeal of the individual coin, but attractive MS-63 specimens can be found in the $100 to $250 range.  Better date or higher grade coins are more expensive, as are examples with exceptionally beautiful toning.

 

PCGS & NGC Certified Toned Morgan Silver Dollars for Sale on eBay

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Over the four-odd decades that the series was in existence, Morgan silver dollars were struck at five different U.S. Mint facilities – Philadelphia (abbreviated “P”), San Francisco (S), New Orleans (O), Carson City (CC) and Denver (D).  The mintmark on a Morgan silver dollar can be found on the reverse of the coin, just underneath the center of the wreath.  Coins from each of these different mints have their own characteristics, which collectors and investors should familiarize themselves with.

For example, Philadelphia Morgan silver dollars tend to have healthy mintages and be well-struck, allowing specimens to be acquired at reasonable prices by those interested in high grade mint-state pieces.  Coins from the Philadelphia mint do not display any mintmark, unlike coins issued by other mints.  Therefore, a silver dollar with no mintmark is always a Philadelphia issue.

The Denver Mint was only opened in 1906, after the initial run of Morgan silver dollars had ended.  As a result, the Denver Mint only produced Morgan silver dollars in a single year, 1921.  Because these coins are exceedingly common, I would not recommend them for the aspiring collector of certified Morgan silver dollars.

San Francisco Mint coins are usually well-struck, especially the early dates in the series.  They were also minted in large quantities to satisfy the considerable demand for hard coinage that existed in the late 19th century American West.  This makes San Francisco issues some of the most readily available high grade certified Morgan silver dollars – a true boon to modern day collectors.  The 1881-S, in particular, is probably the most common San Francisco Morgan silver dollar in uncirculated condition, with perhaps a million mint-state examples still around.

New Orleans mintmarked coins are much more of a challenge than Philadelphia or San Francisco ones.  While mintages were generally ample, coins issued by the New Orleans Mint are often weakly struck, with soft features on the eagle and less detail overall.  Therefore, anytime you find an exceptional New Orleans Morgan silver dollar at a reasonable price, it is an opportunity not to be missed.

Carson City Morgan silver dollars are the rarest and most challenging of the mints to collect.  The Carson City Mint was established in order to convert bullion mined from Nevada’s nearby Comstock Lode into coinage.  Carson City only produced coins between 1870 and 1893, and only did so in modest quantities.  Because of the low mintages of these issues and their extreme popularity among collectors, Carson City Morgan silver dollars are among the most expensive and desirable coins of the entire series.

 

PCGS & NGC Certified Carson City Morgan Silver Dollars for Sale on eBay

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Knowledge is the greatest ally of anyone looking to purchase, collect or invest in old coins.  Therefore, I recommend that the connoisseur of certified Morgan silver dollars purchase a copy of Q. David Bowers’ seminal work on this very popular coin titled “A Guide Book of Morgan Silver Dollars”.  This authoritative book not only provides an extensive history of the famous coin, but also gives an invaluable year-by-year analysis of every date and mint struck.

Morgan silver dollars are one of the most iconic coin series ever created.  And, when purchased in uncirculated condition, they are also one of the most undervalued coins in the world today, with prices hovering around mid 1980s levels!  NGC and PCGS certified Morgan silver dollars in MS-63 or higher grades are a great way for coin collectors or alternative asset investors to buy these beautiful and historic coins with confidence.

 

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