When deciding to invest in precious metals, gold and silver often take center stage. Still, the savviest investor can find gold and silver to be complex investments – there are countless options, each with pros and cons of their very own.
In the last few years, interest in precious metals has significantly grown (without reaching the “tipping point” that would signify a bubble). Across the globe, people are purchasing physical bullion – often silver and gold – to protect their wealth while owning a tangible bartering tool.
Largely left out of the investment conversation is palladium, a luminous, silvery-white metal with characteristics similar to platinum, rhodium and ruthenium.
On the Periodic Table of Elements, Palladium has the symbol “Pd” and the atomic number 46. The soft metal was discovered by British chemist William Hyde Wollaston in 1802, found in a crude South American platinum ore. Wollaston quickly learned to separate palladium by dissolving the ore and then heating it with a combination of chemicals.
Belonging to a category of “transition metals” known as Platinum Group Metals (PGM), palladium is considered one of the most rare, obscure elements in the world. Interestingly, many PGMs develop side-by-side within the Earth, so they’re often mined together.
Palladium is also the least dense (and has the lowest boiling point) of all PGMs. What’s more, it doesn’t tarnish when exposed to the air.
Although palladium isn’t traded as commonly as silver and gold, demand for the metal has risen 40% in the past 2 years. The increase is partially due to investment demand, though palladium – like silver – is also largely driven by industrial demand. The soft, utilitarian metal is used in a variety of products, like jewelry, electronics and even photography.
Recent reports suggest automakers are turning to palladium because, in relation to platinum, the price point is favorable. (At the time this was written, the spot price for palladium was in the $600 range per ounce, while platinum was nearly $1500.)
Catalytic converters (anti-pollution devices that capture harmful exhaust from automobile engines) constitute a bulk of palladium’s industrial demand. Mandated by the U.S. government in the 1970s, and across the globe in the ‘80s and ‘90s, they are now used in automobiles all over the world. Both palladium and platinum are used in the devices, making these metals hot industry commodities.
Aside from its demand for use in catalytic converters, palladium can only be mined in a few locations – though naturally twice as abundant as platinum. Geographically, over 80% of the palladium mined in the world comes from two places: Russia and South Africa. Much of the remaining palladium is recovered from mines in the northwestern United States and Canada.
Accordingly, Credit Suisse Group estimates demand for palladium will exceed supply until (at least!) 2015.
Palladium bars and coins provide a simple, diverse and exciting investment option.
In a large sense, investing in palladium is less complicated than gold and silver. Investors don’t have to spend hours researching countless coins, determining the one that’s right for them.
Indeed, the three most simple, readily available palladium options include:
Canadian Palladium Maple Leaf – With the same design as its gold and silver counterparts, the Canadian Mint is a trusted source for a variety of bullion coins. Its palladium coin has a face value of $50.
Russian Ballerina (Palladium) – As the highest producer of palladium on the planet, Russia's Palladium Ballerina is a major player in the palladium coin market, with face values of 10 Roubles (1/2-oz) and 25 Roubles (1-oz).
Palladium Bars – Attached to a lower premium than coins, investors can consider investing in palladium bars. (Like gold and silver, palladium bars would be more difficult to use in a barter situation than coins, though palladium isn't typically considered a barter tool.)
Available directly through Provident Metals – and securely shipped to your home or office – palladium can also be included in a self-directed IRA account. An Individual Retirement Account (IRA) allows you to take advantage of precious metals investing, as well as tax the benefits available to IRA account holders.
Amid tight supplies, palladium has undergone an increase in demand (a combination that signals strong price growth). Like any investment though, palladium investments are not without risk.
One of palladium’s shortcomings is its periodic price swings, largely due to the metal’s unusual properties and limited availability. In the last decade, palladium has seen highs up to $1200. Again, with its current price hovering around $600 – many analysts say it’s a great time to buy!
To successfully invest in palladium bullion, investors need a thorough understanding of what drives the market and a tolerance for price fluctuation. The fundamentals of supply and demand should keep palladium on a steady upward trend for years to come.
Click on any of the links above or browse our Knowledge Center to learn more about palladium. If you’re ready to check our inventory of palladium bullion and place an order, visit our website and peruse our current inventory.
Orders can easily be placed through our secure online ordering system or by calling (800) 313-3315.