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You’ve likely heard of people investing in popular precious metals like platinum, gold, and silver, but what about palladium? Investors often diversify their assets to achieve optimal investment portfolio growth by purchasing various physical assets, like real estate, jewelry, platinum, and palladium. So, is palladium a good investment for your financial goals?
At Oxford Gold Group, we want to help you secure your future by investing your finances wisely. We understand that everyone has different short- and long-term investment goals, so what works for others might not be a good fit for you.
Below, we discuss everything you need to know about investing in palladium so you can make an educated decision. We recommend speaking with your financial advisor before taking any action.
What Is Palladium?
Palladium is a strong, rare, white-colored precious metal, frequently confused with white gold. Its unique features make it perfect for various uses, like:
- Catalytic converters in the automotive industry
- Industrial manufacturing and chemical applications
- Dental cavity fillings, bridges, and crowns
- Ceramic capacitors for computer motherboards or cell phone circuit boards
- Low-emission electric vehicles
Should You Invest in Palladium Bullion?
Depending on your financial goals, palladium investing can be a solid addition to your portfolio. Like other precious metals, palladium investing typically yields better long-term results than instant wins. Palladium prices frequently fluctuate, though the palladium price forecast displays easy-to-predict gradual trends for anyone who wants to invest for multiple decades.
Adding palladium to your precious metals investing plan offers various benefits. Reasons to consider a palladium investment include:
- Palladium’s “store of value” status: Store of value refers to any asset that maintains its value over long periods. Investing in store-of-value assets offers decreased risks and improved security. Because of palladium bullion’s rarity, a future supply shortage could spike demand, offering favorable returns.
- Palladium market use cases: Unlike collector’s items or antiques, physical palladium is in high demand due to its many uses. For example, the automotive industry uses platinum and palladium in catalytic converters, reducing exhaust emissions from combustion engines. The growing demand for environmentally friendly vehicles increases palladium’s value.
- High-demand status: Many industries need palladium, but there is a low supply of it. High industrial demand relative to the amount palladium miners acquire creates an excellent opportunity for anyone interested in rare precious metal investments.
- Inflation hedging: Inflation is when the value of currency decreases, making your money worth less than it was when you earned it. You can hedge against inflation by investing in assets that appreciate over time. Most precious metals, including palladium, are effective inflation hedging investments.
- Portfolio diversification: Investing in one item is risky because you can lose all your savings if it fails. Diversifying your portfolio across different precious metals or assets helps you gain exposure in different markets, strengthen your investment, and secure your financial future.
How Did Palladium Become So Valuable?
The demand for palladium is stronger than the gold and silver markets because of the limited supply and growing need for environmental solutions. As global warming becomes a pressing threat, hybrid vehicles are a major goal for many car manufacturers. Palladium can help achieve this.
Aside from this goal, companies have shifted toward palladium catalytic converters because of their unique ability to separate and convert nitrogen oxide molecules into harmless gases. Asian car manufacturers have embraced this opportunity to reduce carbon emissions, increasing the demand for the limited palladium supply.
Palladium is valuable not only because of its rising demand but also because of its low supply. Currently, most of the world’s palladium supply comes from South Africa and Russia, which both have potential concerns. With labor rights issues, poor working conditions, and strikes in South Africa and declining output from Russia, palladium production could halt at any time.
As physical palladium becomes rarer, palladium prices increase. If you buy palladium today and the supply tightens even more in the next 10 years, you could enjoy substantial investment success.
Palladium Price Movements Over the Years
While gold, platinum, silver, and other precious metals typically gain value at predictable, steady rates over time, palladium recently soared for the reasons discussed above. In 1998, when global governments began taking action against pollution, platinum metal values increased by over 600%. In August 1977, one troy ounce of palladium was worth $41.70; in December 1998, it reached $332.15.
Today, the value of palladium bars and palladium coins continues to skyrocket. In February 2022, palladium reached $2,981.90 for one troy ounce. So far, no replacement palladium options exist, meaning this market trend should continue as the metal becomes scarcer.
Ways to Invest in Palladium
Many people assume investors stack bars in a private safe in their home, though this usually isn’t the case. Like any precious metal, there are multiple options for investing in palladium. Depending on how much palladium you wish to purchase, your financial goals, and how you want to gain exposure to the palladium market, one of the options below might work for you.
Palladium-backed Exchange-traded Funds (ETFs)
Exchange-traded funds (ETFs) are pooled investment security products that act similarly to mutual funds. Palladium ETFs aren’t direct palladium investments. Instead, they’re standard investments backed by the metal.
This option helps you gain exposure to the precious metal and palladium markets without directly investing in these products.
The most popular palladium ETFs include:
- Aberdeen Standard Physical Palladium Shares: This organization stores its palladium in London, carrying over 130,000 ounces of the high-demand metal.
- Sprott Physical Platinum and Palladium Trust: The corporation holding this trust operates out of Canada. With Sprott Physical Platinum and Palladium Trust, you can invest in palladium or platinum, hold your assets, and sell.
Precious Metal Stocks
You can invest in palladium stocks by purchasing shares of companies that produce the precious metal. To do so, you should carefully research your different options across the globe, including their government conditions, competitive landscapes, and business successes or failures. Since the company’s mines could shut down, investing in a business that produces palladium bullion is much riskier than palladium ETFs.
If you wish to avoid overseas investments, you can invest in palladium with a United States company. While most of the world’s palladium coins and bars come from South Africa and Russia, you can still choose between the following North American options:
- Sibanye-Stillwater (SBGL)
- North American Palladium (PDL)
- Grid Metals (GRDM)
- New Age Metals (NAM)
- Nickel Creek Platinum (NCP)
Palladium Bullion Bars and Coins
Palladium bullion refers to physical palladium bars, coins, and assets. When you invest in palladium bullion, you don’t have to worry about complicated factors like a mine shutting down because you already possess the items. Your top priority when purchasing bullion is keeping it safe and selecting an appropriate storage method.
When purchasing any gold or palladium bullion, always verify the authenticity first. Avoid buying non-certified items online without seeing them first, as they may have impurities or imperfections. You can sell your assets to investors or jewelers whenever you wish to profit.
Who Should Invest in Palladium?
There are many ways to secure your financial future. You might want to invest in palladium if:
- You want investment portfolio growth
- You want to diversify your investments
- Gold isn’t fast enough for you
- You want to join the precious metals market but don’t know where to start
- You prefer lower-risk long-term investments
- Instant wins aren’t your goal
Before making any decisions, we recommend consulting with your financial advisor to discuss the best ways to invest your earnings.
Investing in Palladium vs. Other Precious Metals
Besides palladium, some of the most popular precious metals on the market include:
Palladium differs from gold, silver, and platinum because it’s more volatile, which means its value frequently fluctuates because of the constant supply and demand changes. Investors often prefer palladium because of its rarity and necessity in an environmentally friendly future.
However, gold investors might argue that the unpredictable metal production methods and value jumps make this investment riskier than other precious metals.
When choosing among different ways to invest your money, consider how much you want to make. Some people invest in store-of-value products to hedge against inflation, while others are looking for massive profits. Weighing your goals and the associated risks can help you make an educated decision.
How Much of Your Portfolio Should You Allocate to Palladium?
Financial advisors typically recommend allocating 5% to 20% of your investment portfolio to precious metals. The exact number varies based on your personal goals and existing investments, so it’s wise to speak to a financial advisor.
Oxford Gold Group: Helping You Invest in Palladium
We can help you diversify your precious metal portfolio with certified palladium coins and bars at Oxford Gold Group in Los Angeles, CA. You can trust our products knowing that we have an A+ Better Business Bureau rating and more than 100 five-star customer reviews on Google. When you’re ready to solidify your hard-earned savings, call Oxford Gold Group at (855) 600-GOLD to speak with our team.