Investing in Palladium

Investing in Palladium, the Precious Metal of the Future (ALL you need to know) [2022]

Palladiums are shiny white metals in the same group as platinum, along with ruthenium, rhodium, osmium, and iridium.

Investing in Palladium
Investing in Palladium

The majority of the world’s palladium comes from Russia and South Africa. Most of it is extracted as a byproduct in the mining of other metals, usually platinum and nickel.

The price of the precious metal palladium has soared on the global commodities markets; it has jumped by more than 25% in the last two weeks alone and almost doubled in value over the last year.

At about $2,500 (£1,922), an ounce of palladium is more expensive than gold, and the pressures forcing its price up are unlikely to ease anytime soon.

Palladium is commercially used as a critical component in catalytic converters, a part of a car’s exhaust system that controls emissions found mainly in petrol and hybrid vehicles.

The vast majority of palladium, more than 80%, is used in these devices that turn toxic gases, such as carbon monoxide and nitrogen dioxide, into less harmful nitrogen, carbon dioxide, and water vapour.

Palladium is also appreciated for its monetary benefits as a store of wealth and its investment potential. In the years ahead, investments in palladium may produce some of the most lucrative opportunities in the precious metals complex, even better than gold; here are contents to guide your choice of investing in palladium and other precious metals.

Facts about palladium

Palladium is the forty-sixth element of the periodic table; it was discovered by William Hyde in 1803 and named after an asteroid.

 Rarer than gold or silver, the silvery element is found in only one location in the United States, the Stillwater Mine in Montana, and a handful of others throughout the world. This substance is what gives white gold its signature colour and is found in almost all catalytic converters. 

Keeping this information in mind, here’s a look at  ten fun facts about this precious metal called “palladium.”

  1. Palladium Everyone has a melting point and it just so happens to be 2831 degrees Fahrenheit.
  2. Palladium is one of six metals belonging to the platinum family. The others are platinum, rhodium, ruthenium, osmium, and iridium. All these precious metals are known for their catalytic abilities when it comes to speeding up chemical reactions.
  3. Palladium was discovered by chemist William Hyde in 1803 by dissolving platinum in nitric acid and hydrochloric acid mixture. Once the platinum had fully dissipated, Hyde noticed a secondary metal was left behind.
  4. An extremely malleable and tarnish-resistant metal, palladium has become a popular metal for jewellery making and catalytic converters because it does not react with oxygen.
  5. Palladium can absorb up to 900 times its volume in hydrogen, making it the perfect container to store and filter hydrogen.
  6. For the most part, palladium is a biologically inactive element, allowing for it to be yet another metal perfect for jewellery due to its relatively low probability of causing an allergic reaction.
  7. More than half of all the palladium annually mined is turned into catalytic converters.
  8. Russia and South Africa supply about 40% of the world’s palladium, making them the highest producers each year.
  9. Palladium is naturally found alloyed with gold and other platinum-grouped metals (PGMs).
  10. Jewellers began using palladium in 1939 as a platinum alternative when creating white gold. The precious metal is now periodically used in dental golds and other dental metals.

Palladium price Trends and why it’s increasing

On 28 September 2020, an ounce of palladium was worth $2,258.50. This was already a comparatively high price for the metal, but things were on an upward trajectory, albeit one with some peaks and troughs.

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For instance, as 2021’s markets got going, the palladium price was at $2,385.90 as of 4 January, by the next day, the price went up more than 4% to reach $2,488.10. This was as good as it got at the time, and the palladium market entered a somewhat bearish stretch, with the price trending downward until it fell to $2,226.40 on 2 February. After this, there was some recovery, and the price re-emerged to hover in the $2,300 to $2,400 range again for most of the next month.

Although the price did go down a little, it was still pretty high. The price remained in the upper half of the $2,500’s until 17 August 2021, when it dropped to $2,493.80. Shortages of semiconductors hit car manufacturing, weakening demand for the metal, and both platinum and palladium posted steep losses.

Then a more prominent decline started, and the price dropped below $2,000 for the first time since July 2020. The downward spiral continued, and on the afternoon of 27 September, it was worth $1,947. 

By 7 December 2021, platinum and palladium were defying their overall strength among commodities. Palladium posted steep losses for the first time in recent years, with lows at $1,845.57 and further declines in 2022. 

However, opening on 19 January at $1,890.00, the commodity saw much more action over a very short period, jumping to $2,025.35.

On 24 February, Russia invaded Ukraine, and a few days afterwards, the price of palladium surged, to reach a new all-time high of $3,435.50 on 7 March. However, the value of the commodity will likely retreat in the coming weeks as the global markets respond to political uncertainty.

With that out of the way, let’s take a look at some reasons why the price of palladium will be on the increase;

BEST WAYS TO INVEST IN PLATINUM AND PALLADIUM FOR BEGINNERS (BONUS: INSIDER TIPS ON RHODIUM ): For Investors, For Starters, or For Gifts (Kenosis Books: Investing in Bear Markets Book

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  1. The amount of metal produced worldwide is forecasted to be below global demand.
  2. As a secondary product of platinum and nickel extraction, miners have less flexibility to increase palladium output in response to rising prices.
  3. As shortfall looks set to continue, South Africa, which produces around 40% of the world’s supply, last week said its output of platinum group metals, including palladium, fell by 13.5% in November compared to a year earlier.
  4. Meanwhile, demand for palladium from car makers has increased sharply for several reasons.
  5. Around the world, governments, notably in China, are tightening regulations as they attempt to tackle air pollution from petrol vehicles.
  6. At the same time, the diesel emissions scandal in Europe has also had an impact. Consumers there have been shifting away from diesel cars, which mostly use platinum in their catalytic converters, and are instead buying petrol-driven vehicles, which use palladium.
  7. The US-China trade deal, which was signed, has also boosted prices. Traders expect the agreement to help ease downward pressure on global economic growth and slow the decline in Chinese car sales.

How to invest in palladium and other precious metals

Are you planning on filling up your treasure chest? Let’s take a look at the options available to those who want to invest in palladium and other precious metals.

Commodity Exchange-Traded Funds (ETFs)

Exchange-traded funds (ETFs) are a convenient and liquid means of purchasing and selling gold, silver, palladium, or platinum. Investing in ETFs, though, doesn’t give you access to the physical commodity, so you don’t have a claim on the metal in the fund. You will not get the actual delivery of a gold bar or silver coin.

Common Stocks and Mutual Funds

Shares of precious metals miners are leveraged to price movements in the precious metals. Unless you’re aware of how mining stocks are valued, it may be wiser to stick to funds with managers with solid performance records. 

Futures and Options markets

The futures and options markets offer liquidity and leverage to investors who want to make big bets on metals. The greatest potential profits and losses can be had with derivative products. 

Bullion

Coins and bars are strictly for those who have a place to put them like a safety deposit box or safe. Certainly, for those who are expecting the worst, bullion is the only option, but for investors with a time horizon, bullion is illiquid and downright bothersome to hold.

Certificates

Certificates offer investors all the benefits of physical gold ownership without the hassle of transportation and storage. That said, if you’re looking for insurance in a real disaster, certificates are just paper. Don’t expect anyone to take them in exchange for anything of value. Visit www.investopedia.com for more options.

5 ways to profit from your precious metals investments today

There are many ways to buy precious metals like goldsilver, and platinum and make a great profit; here is a list of options for you

  1. Buy Bullion 

The most traditional way that you can gain a profit from precious metals is to purchase physical precious metals such as Gold. You can purchase gold coins, gold bullion, or gold collector coins. If you are looking to simply invest in gold, getting gold bullion or gold coins is going to be your best option. Gold collector coins tend to charge a premium over the spot price because they are particularly rare. 

  1. Buy Gold/ other precious metal Mining Stocks. 

If you are looking for a leveraged play on the price of gold, then you will want to consider gold mining stocks. These are stocks in companies that are engaged in the exploration and mining of gold. Within the gold mining stock world, there are two categories – junior gold mining stocks and conventional gold mining stocks. 

  1. Buy precious metals ETFs 

If you don’t want to purchase physical precious metals, then you can simply purchase gold exchange-traded funds or ETFs. These funds track gold’s value in the futures market or the fund is backed by physical gold. Here is a look at some of the most popular precious metals:

SPRD Gold Trust (GLD) – This is a gold ETF that tracks the future price of gold, and it is not correlated with the spot price of gold.

Aberdeen Shares Physical Gold Shares ETF (SGOL) – This ETF is backed by physical gold and more accurately reflects the spot price of gold. 

  1. Buy precious metals ETF Options or Gold Futures. 

If you are willing to take on some more risk, then you can purchase precious metals ETF options or futures contracts on gold. Be aware that options and futures have a time component. That means that the price of the option or contract must be higher than the underlying price for it to have any value. 

  1. Forex Investing 

If you want to speculate on the short-term price movements of precious metals, then you can use a forex account to trade precious metals such as gold and others against several different currencies. Forex trading allows leverage of up to 100 to 1. That means that a 1% move against you can liquidate your position. Therefore, you should use extreme caution when using forex to speculate on the price of gold and precious metals. visit www.allegiancegold.com for more options.

Conclusion

We all are looking for other ways to build and protect our wealth for the sake of ourselves and our family’s future; there’s no better time than now to diversify your portfolio.

Portfolio diversification is the practice of investing your money in different securities to minimize your risk. It means not putting all of your eggs into one basket. In doing so, even if one of your investments fails to do well in a particular period, you can always get better returns from the other securities you have, and Investing in Precious metals is a great opportunity for portfolio diversification.

Precious metals are elements that are rare to find. Due to their scarcity, they have a high economic value. That’s why most societies use them as stores of wealth. Precious metals have been considered valuable since time immemorial.

Even today, they’re an integral part of numerous investors’ portfolios. This indicates that the future of this particular investment option is bright and would yield a great return, so start “TODAY”, and make Palladium your next investment option as a better future awaits you.

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