Platinum and palladium are both members of the PGM family of precious metals, but they vary in terms of price and composition
As precious metals go, platinum bullion and palladium bullion lack the attention and regard that gold and silver get. Yet, in times of economic gloominess, platinum and palladium also perform well as a safe haven and hedge against inflation. Furthermore, unlike gold, the white metals – platinum, palladium and silver – are often able to better withstand slides in the precious metals market due to their high industrial value.
For these reasons and others, precious metals investors are wise to diversify their portfolio not just with gold and silver, but also platinum or palladium. But which one should you choose exactly?
Both platinum and palladium are naturally-occurring members of the PGM (Platinum Group Metals) family. Iridium, osmium, rhodium, and ruthenium are also considered PGMs. Platinum-group metals are widely renowned for their catalytic properties and resistance to wear, tarnish and chemical degradation – qualities that make PGMs highly valued by the auto manufacturing and jewelry industries.
Platinum and palladium, in particular, are like two sides of the same coin. In fact, they are often found mixed in together during the mining process. Plus, platinum and palladium are nearly identical; it is difficult to see any difference between them.
However, as you’ll learn below, their seemingly minor differences can have major implications when deciding which to invest in.
Platinum is much rarer than gold or silver. In fact, the global supply of platinum is estimated to be 1/10th that of gold and 1/100th that of silver. (Consider this: It is commonly said that all the gold ever mined could fit into 3 1/4 Olympic-sized swimming pools, but the entire world's supply of platinum could easily fit inside your home!)
Palladium is one of the rarest metals on earth and even more scarce than platinum – 15 times more rare to be precise. If all the platinum in the world fits in your house, then every ounce of palladium can easily squeeze inside your living room.
Historically, platinum prices are frequently higher than gold; however, in recent years platinum has had periods of trading lower. Platinum and palladium will often maintain a similar price ratio, but the two white metals are indeed capable of solo surges.
Though it is rarer than platinum, palladium is typically a lower-cost investment.
Because nearly 80 percent of the world's palladium supply is controlled by just two countries (Russia and South Africa), prices can be more volatile than other precious metals. (For example, from 2005-2011, palladium sunk to a low of $168 per ounce and then rebounded to a high of $858 per ounce.)
Platinum is denser than palladium, making it less susceptible to breaking and more valued by some manufacturers and jewelers. This quality is a major reason why platinum prices are often double palladium going rates.
Palladium has many of the same chemical properties as platinum, but is less dense and has a lower melting point.
Platinum Industrial Use
Because of their unique properties, both platinum and palladium are heavily used by the auto industry to make catalytic converters for vehicles, as well as a common material in jewelry. Platinum, in particular, is valued by jewelers since it is heavier and more durable.
Palladium Industrial Use
Many analysts believe palladium is gradually replacing platinum in the industrial sector because of its lower cost and ability to perform virtually the same role as platinum. Dentistry and electronics are two other major sources of demand for palladium and platinum.
When the early Spaniards first stumbled upon a white metal that looked like silver but was different, they gave it the name platina – the Spanish term for "little silver" – and threw it back in the ground to "mature" into real silver. Now, of course, we call this metal platinum.
Palladium was named by its discoverer, William Hyde Wollaston in 1803 after the Greek goddess of wisdom Pallas, as well as the asteroid of the same name which was discovered around the same time.
Start Investing in Platinum Metals Today
Whether you’re interested in investing in platinum or palladium, (or both), make Provident Metals your home for all your precious metal needs. We’ve got beautiful platinum bullion coins in stock like the American Platinum Eagles and Canadian Platinum Maple Leafs, as well as rare palladium coins!
If you are still in the process of learning about platinum and palladium investing, consider browsing our knowledge center and blog for more information. For starters, check out our overview of palladium investing, as well as this infographic showing the many industrial uses of PGMs.