Much of the precious metal market obsesses about gold and silver in the main, largely down to their status as safe-haven metals. Their market volatility and price direction is often accounted for by monetary policy overtures and investors’ risk appetite. Of late, such sentiment has also dominated market discourse for platinum, but not quite so for its sister precious-metal palladium, which outperformed the lot of them in 2016, and continues to do so (this far) into 2017.
Away from prying market headline seekers, palladium, as IBTimes UK reported, has notched gains of over 10% to 13 January, barely weeks into the new trading year. Such gains follow a climb of over 20% on an annualised basis last year. Therefore, investing in palladium might sound like a great idea at the moment. Given it’s a speciality metal, taking a bet on it is a bit more complicated than your average flutter on gold.
However, should you choose to go down this path and partake in the new palladium rush, it is worth understanding the metal and its uses, alongside investment pathways that are available complete with caveats and pitfalls, as outlined:
How rare a precious metal is palladium?
Palladium is without doubt one of the rarest precious metals on earth, roughly about 15 times more rare than its sister metal platinum, and around 30 times rarer than gold, the world’s preferred safe-haven asset.
Where is it mined?
Bulk of the world’s palladium is mined in Russia (41%) and South Africa (38%). Canada, US and Zimbabwe are other major producers. Decrease in production from the aforementioned can contribute to price spikes, and over the last decade there has almost always been a persistent supply deficit.
What is it used for?
Palladium is used in automobile manufacturing, electronics, dentistry and fuel-cell production. Of these, automobile manufacturing, where palladium is utilised in catalytic convertors for petrol powered vehicles, accounts for over 55% of the precious metal’s demand.
Source: International Business Times