P alladium has the same chemical properties as platinum. It is one of the four most important precious metals on the commodities market. The precious metal is very rare and shines silver white. The demand for palladium comes mainly from the industrial sector: the automotive industry in particular needs the raw material for catalytic converters and in future hydrogen vehicles (fuel cells).
Palladium as an investment
The direct investment in physical palladium as coins or bars is possible, although the supply is scarce and limited. Palladium investment coins usually have a fineness of 999.9. In addition, there are listed securities such as shares, funds, certificates, exchange-traded commodities (ETCs) and exchange-traded funds (ETFs). The return on investment depends on the price development, as precious metals do not yield any regular income, interest or dividends.
Palladium and value stability
Many investors are looking for investment alternatives, especially in periods of low interest rates. One option and an innovative way forward, is to invest in palladium. The good thing about it: precious metals convince in the long term with their value stability and investment security. The palladium chart is notable for high price volatility, but investors with patience are rewarded with good yields. Fundamental data suggest that palladium will continue to offer good investment opportunities in the future.
Palladium and the industry
The demand for palladium is strongly driven by the automotive industry. The use of palladium is required for catalytic converters in gasoline engines. Palladium guarantees clean air. The automotive industry is both a curse and a blessing. If global car sales of gasoline engines stagnate, a large part of the demand will fall away. Palladium is also used for dental prostheses, medical instruments or in aviation (spark plugs). In addition to industrial use, palladium is mainly used in the jewelry industry.
Occurence and extraction
Palladium is mainly produced in South Africa and Russia. In South Africa, production is interrupted by long strikes in the mines, while palladium reserves in Russia are almost exhausted. This can have a rapid impact on economic relations between Russia and the West and can be used as a political weapon. Already persistent speculation could cause the price of palladium to skyrocket.
Palladium investors benefit from demand
Palladium is becoming more and more interesting for industry and investors. Market pundits are therefore forecasting a rise in prices. Anyone who wants to invest in palladium as a valuable asset can benefit from supply and production bottlenecks and limited reserves. More and more banks are issuing palladium ETFs. As a result, larger quantities of the precious metal are withdrawn from the industrial market, which in turn can drive prices up.