Palladium, the metal
Palladium is one of six metals that form a group of elements referred to as the platinum group metals (PGM). Palladium has a resistance to oxidation, one reason palladium is growing in popularity for jewelry, especially in Asia. Still, the primary use for palladium is in autocatalytic converters, where palladium reacts similarly to platinum in combating pollutants. Herein lies the reason for volatile prices in the palladium and platinum markets.
Palladium, the market
From time to time, it seems about every five to seven years, some major auto maker and its catalytic converter manufacturer announce that they are switching from platinum to palladium, or vice versa, in the manufacture of converters. This causes the metal being dropped to fall in price and the metal doing the replacing to rise in price. Frequent production and supply problems in South Africa and Russia, the two major sources of platinum and palladium, add to volatility in the metals’ markets.
Only rarely does CMIGS make recommendations on palladium or platinum because it is difficult-if not impossible-to anticipate the next bombshell to be dropped on the palladium or platinum market. However, when palladium or platinum trade at double the price of gold, we suggest that investors owning palladium or platinum consider trading for gold or silver.
Investors interested in buying palladium coins or bars should try to buy when palladium is trading at or below its 200-day moving average.
Palladium coins as money
Despite numerous government mints having produced palladium coins in recent years, palladium does not have a history of being used as money. The mints turned out palladium coins solely to take advantage of the excitement surrounding palladium as it was heralded as platinum’s replacement. As it turned out, palladium and platinum have taken turns replacing each other and causing volatile price swings in both metals.
If you want to discuss investing in palladium bullion bars or coins, give us a call. The links in the far right column will take you to pages that discuss the individual palladium coins and palladium bars that are presently being produced.