The Least Known and Best Performing Precious Metal / Commodities / Palladium
Goldand silver have risen substantially off the price bottom put in just 2-½ yearsago, but the gains have yet to attract much notice. Gold has gained roughly 28%and silver is up 20%.
Meanwhile,another metal has more than doubled since bottoming. This performance shouldhave been more than enough to catch the attention of metals investors, if onlythey were watching. The metal is palladium and, for those who haven’t paid muchattention, it is time for a brief update.
Palladiumis one of the platinum group metals (PGMs) and it has a lot in common with itshigher profile brother.
Likeplatinum, palladium is a lustrous, silver-white metal. It has many of the sameapplications. The largest application is in automobile catalytic converters,but there are also uses in jewelry, dentistry, surgical instruments, andelectronics.
Palladiumalso shares platinum’s troubled supply chain.
Thetop producers are Russia and South Africa. The latter nation has fallen deeperinto turmoil in recent months.
Minesthere have dealt with unreliable electricity and labor strife for years.Operators are now at great risk of the having mine properties seized bygovernment officials.
PGMsrepresent a good way for bullion investors to diversify and gain exposure todifferent market fundamentals.
Diversificationcan reduce the volatility in any investment and can produce better results –particularly in weaker markets. Just consider the relative outperformance ofpalladium versus gold and silver over the past 30 months.
Investingin palladium makes sense for investors who anticipate rising demand for carsand trucks which produce lower emissions globally. If the economies of Chinaand India continue to develop rapidly, demand for the metal should keep rising.It will not take a lot of additional demand to completely outstrip supplies.
Onewild card is the adoption of electric vehicles, which do not have catalyticconverters and require very little of the metal. For now, these types ofvehicles are costlier and have severe limitations in terms of range and power.
PalladiumBullion Options
Thenumber of product options available to bullion investors has grown. The U.S.Mint produced a 1 oz palladium American Eagle for the first time in 2017.
Thesmall issuance of those coins sold out very quickly, but more are expected in2018 and the number of coins minted will likely increase.
TheRoyal Canadian Mint has been producing a palladium Maple Leaf since 2005,though not consistently each year. Today, this is the best option for investorswho want an official, government issue coin. They are almost always in stockand premiums are affordable.
Finally,investors can get palladium in bar form. Bars in assay packaging from Swissrefiners such as PAMP and Credit Suisse are comparably priced to the MapleLeaf. And there are more size options available – including 1-gram and10-ounce.
By Clint Siegner
Clint Siegner is a Director at MoneyMetals Exchange,perhaps the nation's fastest-growing dealer of low-premium precious metalscoins, rounds, and bars. Siegner, a graduate of Linfield College in Oregon,puts his experience in business management along with his passion for personalliberty, limited government, and honest money into the development of MoneyMetals' brand and reach. This includes writing extensively on the bullionmarkets and their intersection with policy and world affairs.
© 2018 Clint Siegner - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.