Though palladium may not be as common as the other precious metals, it is known as one of the most valuable because of the extensive applications. Its heavy use in different industries has caused a surge in its price, especially with low supply and growing demand. Given this point, palladium has slowly gained recognition as an investable metal that can reach a premium above other precious metals in the coming years.
If you are looking to invest in palladium online or through other sources, then it will help to understand the nature of the metal and its prices before you jump into it. Though the investment may work similarly to other metals, the palladium market may be driven by other forces that will help you understand the price trends.
Why Invest in Palladium?
The prices of palladium are driven by the principles of supply and demand, especially those in the automobile and jewelry industry. Palladium is commonly used as catalytic converters for cars to reduce pollution in the environment. Given the vast production of automobile companies and growing environmental awareness, palladium use is growing, and thus the supply has been dwindling over the years. Similarly, palladium is also growing to be the latest trend in precious metal jewelry, as many see it as an alternative to traditional wedding bands.
Given its strong demand, palladium has fared better than any other precious metal in the last six months of 2019 and is predicted to continue growing in 2020. Some consider palladium to be the best-performing metal of the decade. As a result, more and more investors are eyeing this metal as they expect its price to rise even more in the future.
Types of Palladium Investments
Similar to other precious metals, you can invest in palladium through exchange-traded funds, physical form, or stocks. Each option has its pros and cons, so you must sift through them carefully before deciding which may be best for your investment portfolio.
1. Exchange-Traded Funds (ETFs)
ETFs are a popular form of investing in metals since they are often seen as less risky compared to methods like futures contracts or stocks. Palladium ETFs work similarly to other precious metal ETFs and help you track the prices of the metal. However, similar to stocks, you do not physically own the palladium but rather, contracts that are backed by the metal.
2. Physical Palladium
Physical palladium commonly comes in the form of billions and coins, as bars and wafers are not as common. If you are looking for palladium online, you need to be wary of the vendor you are dealing with and ensure you purchase authentic metal. The most significant advantage of this investment option is that you have a tangible object to prove ownership, but it can be costly to store and preserve the metal, especially if stored for a long time.
With stocks, you can indirectly reap the benefits of palladium by investing in a related business, specifically a palladium mining company or producer. Since the prices of the metal have been at an upward trend, you may be able to get significant gains from investing in stocks. With that said, it can also be challenging to go with this option since there are not many palladium miners.
As with investing in any other precious metal, investing in palladium can be challenging, more so with this metal since it is less common compared to the other types. Nonetheless, palladium continues to show promising potential as an investment, with its price rising continuously over time. With that, now may be the time to invest in the metal if you have not yet done it.