As with all things, the GM should adjust the scarcity with an eye towards it's true impact.
A lot of posts I see can have very powerful affects on a campaign if allowed to occur in large quantities, but the same can be said for classic magical metals like Mithral and Adamantite. Some pretty good subs get low ratings because people extrapolate the impact of large quantities of the material.
The sensitivity of the material I have left somewhat deliberately vauge - the only hint provided is from the passage at the start:
Now, as I bring it near this enchanted helmet, do you see the change? Note how the goblet lightens in shade as I bring it closer?
It is up to you how strong that helmet was in magic, and how close he had to bring the goblet for it to change color. Go to Comment
It is supposed to be a physical process, like some materials glow when struck by UV light, so it is difficult to interfere with it apart from blocking the magic emmissions.
Now, since it is not in itself magic, spells could be created to darken the material again or otherwise hide it's feedback. Without any magical energy of it's own, it will have no way to oppose a magical effect.
As for it's mechanical strength, it is an analog to silver and can be mixed with steel or other alloys, but it will reduce the strength of that material. It is much better used as a surface treatment, just as you would silver a sword or arrow. I'm partial to the idea of inlaid runes myself, glowing mystical symbols instead of the whole blade.
In worlds where this metal can be found, use of it to produce devices 'certified' against magical influence would be common. To prevent magical tampering with scales used by merchants, it may be mandated that scales be made or at least coated with such a metal. This of course does not prevent more mundane forms of tampering, but should prevent use of invisable weights. Go to Comment
One of the standard peices of equipment for an adventurer is a sword. But swords were actually very complicated to manufacture. Therefore, an adventurer who owned a sword might have had it passed down through the generations or might have been rewarded by some influential figure. Or simply looted it from a tomb.