When most people think of investing in precious metals, gold and silver are likely the first two metals-maybe the only metals-that come to mind. While gold and silver may make up the bulk of a precious metals portfolio, there are other metals that may be considered for inclusion in your holdings. Platinum and its cousin palladium may give your portfolio a degree of diversification and could potentially enhance overall returns.
What exactly is Palladium?
Palladium is a rare and lustrous silvery-white metal that was discovered in the early 1800s by William Hyde Wollaston. Palladium is part of the platinum group of elements that includes platinum, palladium, rhodium, iridium, ruthenium and osmium. Over half of the palladium supply is used in the production of catalytic converters and palladium is also used in medicine, dentistry, jewelry, water treatment and chemical applications. Palladium is also a critical component in fuel cell technology.
Palladium deposits are rare and are found in South Africa, the state of Montana, Ontario Canada and Russia. Recycled palladium also makes up part of the metal’s supply.
Because palladium has many potential applications and is of limited supply, the metal is sought after by investors.
Palladium Investment Products
Physical Palladium is available to investors in multiple forms including bars, coins and rounds. Popular palladium bar sizes include one ounce and 10 ounce bars. Popular palladium coins include Canadian palladium maple leaf coins and Chinese palladium panda coins. While there may be other products and weights available, the standard single ounce and 10 ounce sizes are likely to have the most liquidity.
Why Don’t More Investors Buy Palladium?
Palladium is not nearly as popular as silver and gold. There are a few reasons for this. First of all, palladium simply does not have the same history that silver or gold do. While silver and gold have been used for thousands of years as a medium of exchange and store of wealth, palladium was only just discovered in 1803. It simply does not carry the same reputation for reliability that gold or silver does, although this could certainly change with the passage of time.
Because of very limited supplies and the metal’s industrial uses, prices for palladium can be volatile and change rapidly. This may keep some investors away, especially those that are not focused on the long-term. In addition to this, many investors simply are not aware of palladium. While they may have heard of it before, they are likely not educated on palladium’s history, supply, uses and demand.
Why Consider Adding Palladium to your Portfolio?
Palladium, like gold and silver, is of limited supply. As industrial applications for palladium increase, prices could rise if supplies remain constant or decline. Put another way, the laws of supply and demand could potentially drive palladium prices significantly higher from current levels.
While palladium does not have the history that gold or silver has, it does share many similar qualities. This metal is only found in a few places on earth. It is available in limited quantities and it carries no counter party risk.
Palladium may be affected by many of the same factors as other precious metals. Changes in currency values, overall risk appetite and geopolitical factors can all potentially influence palladium prices. Palladium values may also be dictated by other factors such as industrial demand or technology.
Diversification is always a good thing in our view. If you add palladium to your gold or silver holdings, it can help diversify your precious metals portfolio and potentially increase overall returns.
If you own physical gold or silver, or are looking to begin building a precious metals portfolio, we encourage you to consider palladium as well. One of the easiest ways to acquire physical palladium is using your IRA account. Speak with an Advantage Gold account executive today about how palladium might fit into your precious metals portfolio. Our account professionals will answer any questions you may have and are here to assist you in acquiring physical precious metals such as gold, silver and palladium. Call us today at 1-800-341-8584.