Stacking Palladium Instead?
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Palladium is the unknown Precious Metal that is probably next in line behind Platinum. I had a look at Platinum yesterday and I think I talked myself out of investing in it, while many comments from other stackers started mentioning other Precious Metals that I know even less about. So today I thought I would have a quick look at Palladium, symbol Pd on the periodic table.
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Palladium is also currently cheaper than Gold but its recent price history is interesting in that it seems to be more closely correlated with the stock market and other commodities rather than Gold or other Precious Metals. We see here there is a big peak just after the dotcom peak in late 2000 with troughs corresponding to the subsequent lows in the S&P 500 in July 2002 and after the GFC in January 2009. It has been climbing alongside the S&P 500 ever since. It is currently sitting at record highs at $1,127.80 USD per ounce, alongside the record highs of the US Stockmarket. So it has been behaving more like a Commodity than a Precious Metal from a price perspective.
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Palladium products can be hard to find. There are a few coins such as the Australian Palladium Emu that was only minted from 1995 to 1998 which can be so rare they will carry a hefty premium. The Canadian Mint has been minting Palladium Maple Leaf coins since 2005 and recently the US Mint has started minting a Palladium American Eagle. There are also some nice minted bars from Credit Suisse and Baird & Co.
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Approximately 90% of Palladium demand comes from Industrial Usage which goes some way to explaining why it’s Price History looks more like a Commodity and tracks the S&P500 rather than other Precious Metals like Gold. Very similar to Platinum in that a lot of this Industrial Usage is for manufacturing catalytic converters in vehicular emission control units. Also just like Platinum it has an array of medical uses, which is not that surprising since these Precious Metals have a lot of common properties. It is interesting that despite the significant similarities there is a divergence of price between Platinum and Palladium which might suggest the two metals are competing for Industrial Use in the Automotive Industry.
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Just like Platinum there are Allocated and Unallocated accumulation programs offered by Bullion Dealers. There are Exchange Traded Funds for Palladium available on most major stock exchanges. Mining companies with Palladium prospects can be hard to find and they usually have other metals in their portfolio. The biggest is probably Norilsk Nickel which accounts for 41% of global Palladium production but with such a broad range of base metals it can be near impossible to find a pure Palladium play in the mining sector. Sometimes it is possible to find ETFs which are made up of mining companies with a particular commodity focus, but I haven’t been able to find one for Palladium.
Before researching this post I didn’t know much about Palladium but I am finding myself intrigued by this Precious Metal. The idea of adding a something to my stack which has a correlation to the stock market is an interesting concept. I feel like I should be doing a bit more research into catalytic converters to see if I can figure out why there is a price divergence and whether Platinum is a better buy because it’s undervalued, or whether Palladium has a better long-term future as an Industrial metal even with the impending electric car boom. That said, if I can find a Palladium Canadian Maple of American Eagle locally with a reasonably low premium I might grab one.
http://www.westendcapitalmanagement.com
https://www.moneymetals.com
https://www.apmex.com
https://www.kjc-gold-silver-bullion.com.au
http://www.gold-eagle.com
Palladium and Platinum are like the metal market's version of crypto, their prices swing all over the place. I've seen $2K platinum and I've seen sub $900 platinum. Palladium was selling at around $200 10 years ago, now it's a monster.
Now that I've got some experience with Crypto grade volatility then trading these two should be a walk in the park! :)
Of the two, I like Platinum in the long run...I'm thinking of putting on an options strategy to capture the rise of Platinum relative to Palladium. I just don't think the divergence is justified. Long Platinum +1 Short Palladium -1...but that can often lead to "poof its gone"
Very interesting. If you do end up doing this can you please share your strategy and experience. I haven't played with Options for years as I was never particularly good at it, but I am interested to see how you might execute this.
I think neither will be money. You may as well stack copper.
Platinum is primarily used in carburetors. If electric vehicles take off, that is a significant portion of demand dropping out.
Palladium I don't know about, and I don't invest in things I don't know well.
Neither of them will ever be money...Platinum can just as easily be used in corroborators and is actually more effective in many designs...that is my main thesis for why the price difference between Palladium being $300 higher is completely unsustainable. Auto makers will just switch to Platinum and save about $100 per car.
With more cars going electric there will be no more need for mufflers or catalytic converters.
The production of electric cars is at an all time high, but so is the production of gas powered cars and If the government subsidies for electric cars continue to get cut, I don't see less gas powered cars on the horizon anytime soon. The infrastructure needed to get mainstream adoption of electric cars in the US, China or Europe just isn't there and there are still are no serious plans to build them.
Palladium or Platinum is used in catalytic converters allong with Rhodium.
Palladium is what is mixed with yellow gold to create white gold though. So the jewlery industry just has to step up its game if we go full electro
Yes, but Copper is about 0.20 cents per ounce compared to Palladium at $1134 USD per ounce so that's a factor of about 5580 times more space required to stack a similar value of Copper. My point here is that this appears to be a Commodity that could be reasonably stacked in a vault or safe.
Not carburetors, catalytic converters....
Carburetors mix the perfect fuel to air ratio for combustion.
The Platinum oxidises carbon monoxide and hydrocarbons in exhaust gas.
Yes that is what i meant lol
I still think that silver has much more of an upside than any of the other precious metals. But diversity is the spice of life.
I agree that diversity is important. What I'm seeing here is a potentially useful diversification of my stack so that's why I am interested.
I think the best thing to learn about in the platinum/palladium space is the cartel that was formed between Russia and South Africa (Both Briics countries) That could prove very interesting. They keep saying "its not a cartel" on TV which sounds like someone is forming a cartel to me hehe.
I don't know much about palladium but here's my thoughts on platinum
South Africa has approximately 80% of the worlds platinum reserves.
South Africa has been having awful trouble with its platinum mines with many closing or reducing production as they have been producing below or near cost leading to almost no new investment.
750 000oz of production was lost last year to strikes alone!
South africa doesn't have a state run platinum miner so they have to get some agreement from the miners (Amplats and Lomin are the big 2) if they want to reduce producion
Although it may take a while, once the supply excess have been run through I can see a long bull market.
"The author of a bull market is a bear market"
Very interesting. Sounds like a recipe for higher prices as South Africa carries a fair amount of Sovereign Risk these days.
I started writing you a response about the Sovereign risk in South Africa. It turned into a whole article. If you are interest its here
https://steemit.com/steemsilvergold/@tony10/could-south-african-sovereign-risk-cause-an-explosion-higher-in-platinum-prices
I never got into palladium or platinum as there were always extra costs involved. But I am still convinced that silver is the one to watch.
I agree here. I've been buying bigtime since 2015. I don't think you'll be disappointed soon
I do like Silver but it does tarnish and requires a lot more space to store safely.
Do stackers stack to accumulate wealth to use later? Is it for an apacolyptic scenario?
Every stacker is different. I personally don't believe we will have an apocalyptic scenario (I certainly hope not) but I do believe the fiat money and the current financial system is broken so we will have another big crisis.
So it's a means to store worth outside of a governed monetary system. Does the community ever trade BTC for silver?
Palladium has had quite a run over the past two years. I too have tried to balance my Palladium and Platinum purchases, but it might be time to sell Palladium. Platinum is way under priced to Gold, traditionally holding at least a $200 premium, but is 15 times rarer than Gold. So in my view, Silver and Platinum are the under-valued commodities.... GO get ya some..........
I've got Silver already and was looking at Platinum. I think I need to research it a bit more.
I try to get a bit of palladium but not sure if this counts as stacking already.
I have no real ratio in mind but if I stumble over a coin I like I might pick it up.
I have ordered the queen beasts platinum coins for example just to get a collection going but will also focus more on silver and gold.
Ah, I haven't seen the Queens Beasts Platinum coins yet. Thanks for the tip!
Great post mate, not many people talk about the other white metals, just a side note, I don't know if you are aware but palladium attracts a 10% GST in Australia, cheers mate.
I did not know that! Thanks for the tip.