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What are the Top 10 Palladium Facts?

Investors of precious metals are showing more interest recently in palladium. Stores of value become increasingly important during times of macro events that negatively affect world markets. That is usually when investors find ways to store their wealth safely and ride out the storm using assets such as palladium. Others like to hold it long-term, so palladium can act as both a safe haven asset like gold and silver, as well as a long term store of value.

Palladium is the least appreciated of the four precious metals

You might be surprised to learn that palladium has outperformed the other three most popular precious metals, gold, silver, and platinum, even though it is the least known and appreciated of the four. This is a relatively new advancement. It was only in 2019 that the price of palladium overtook gold’s price. Palladium’s emergence as a viable precious metal for investing is largely related to the supply and demand forces behind it.

Since palladium is only mined at 10% the rate of gold and is only in a limited number of locations worldwide, its supply is much smaller and less likely to fluctuate. At the same time, demand for palladium has gone up in recent times, mainly due to investors looking for additional ways to hedge their investment portfolios. But palladium is also an essential metal in many different industries, from dental fillings to chemical compounds, and most importantly, the automotive industry.

In particular, the automaking sector relies on palladium to make catalytic converters, an auto part that helps reduce carbon emissions. As governments across the globe pass new laws restricting emissions and creating new standards, auto manufacturers turn to precious metals like palladium to help them come under compliance.

World governments are working together to reduce carbon emissions, which could have a long-term effect on the success of palladium as an investment.

Palladium prices have appreciated more than the more popular precious metals

Much to the surprise of many investors, palladium prices are showing stronger recent returns than gold, silver, and platinum. In fact, over the last decade, palladium has been appreciating more than all the others.

Usually, when the USD is in decline, it is time for all precious metals to shine. But recently, palladium has taken the lead. In 2019, it led the way with a price increase of 59% on the year. Leading up to 2019, the amount of palladium available was below the amount of demand for eight years straight, which explains how the price rise was due to scarcity and demand. Now it is the most expensive of the big four precious metals.

With this steep increase in price, investors have remained bullish on palladium. Automakers, who use about 85% of all available palladium, utilize the precious metal in manufacturing cleaner gas-powered automobiles as well as hybrid-electric cars. The palladium element is a key compound in exhaust conversion, turning toxins into water vapor and carbon dioxide.

Because emissions standards are becoming more strict, automakers need an increasing supply of palladium. But palladium mining happens at a very low rate compared with gold or silver, so its supply is tightening just as demand is growing. No wonder that investors are moving into this precious metal as a safe haven.

When this supply and demand scenario compounds with a weakening dollar and highly volatile markets like in 2020, it’s easy to see a bright future for palladium as an investment. In today’s modern economy, investors can find a multitude of ways to invest in palladium.

Choices include buying bars and bullion from official mints, buying palladium-backed stable coins like Palladium Coin, or even purchasing ETF shares or futures contracts.

Whichever investment vehicle the investor chooses, they are looking to get in on a precious metal that has historical merit as a store of value as well as a promising level of demand from industrial sources. It is easy to understand why palladium is becoming more popular each year as a store of value for hedging inflation and storing hard-earned wealth.

What are the Top 10 Palladium Facts?

Palladium bars

What are the Top 10 Palladium Facts?

Palladium is becoming more intriguing by the minute. With its recent dominance over gold, silver, and platinum, to its significant importance in the clean energy sector, we are sure to be hearing about palladium more and more in investment circles. This is good because palladium does not have a historical context like gold and silver.

Many investors have never heard of palladium before. Most civilizations have used silver and gold in some manner, and people worldwide are highly familiar with these precious metals, what they are used for, and how people can invest in them. But palladium? Not so much. To get some background into palladium and gain some knowledge about this exciting precious metal, we have curated some fascinating facts to help give you an introduction:

  1. Palladium occurs naturally in deposits of gold and platinum. But most commercial production facilities utilize the palladium from nickel-copper deposits that come from mines in Canada and South Africa. To extract a small amount of palladium, a large amount of nickel-copper must be mined. Because of this large amount of another useful metal alloy, extracting palladium becomes profitable even though it is so rare.
  2. It is very rare to find palladium in nature. The best possible locations for palladium mines are in South Africa, Russia, Canada (Ontario), and the United States (Montana). Smaller mines are also operating in Ethiopia, Brazil, and Australia. But South Africa and Russia combine to produce close to 73% of the world’s supply.
  3. The price of palladium surpassed gold for the first time in many years in 2019 and did so again in early 2020. On January 17th of 2020, palladium’s price rose to $2376.80, a new all-time high. Since then, it has continued to surge largely due to increasing demand and a tight supply. In the past five years, palladium saw major gains in price. Forecasters remain positive on palladium’s outlook and expect this trend to continue.
    Palladium price – last 5 years:
    2020: up 27.46%
    2019: up 54.48%
    2018: up 12.84%
    2017: up 55.81%
    2016: up 20.96%
  4. Palladium is thirty times more scarce than gold. So when traditional assets are faltering and during eras of high uncertainty and volatility, palladium price may be more strongly affected as a safe haven precious metal since it’s much more scarce than other precious metals. This level of scarcity isn’t going away soon. Forecasters see demand for industrial palladium increasing over the next few years combined with the growing interest in palladium as an investment.
  5. Close to 85% of all available palladium is in use by automobile manufacturers for the production of catalytic converters for reducing toxic emissions. As automobile companies face more rigid standards for emissions, the demand for palladium continues to grow. Catalytic converters for regular-sized vehicles use about 2-7 grams of palladium, while those for larger SUVs and trucks need anywhere from 6-30 grams.
  6. The United States now mints the American Palladium Eagle coin as an official source of palladium bullion. Each coin has a face value of $25 and is certified to contain 99.95% fine palladium. The making of this coin began with the passing of the American Eagle Palladium Bullion Coin Act of 2010. This became official during the 111th Congress when Public Law 111-303 passed, leading the way to the coin’s production.

    What are the Top 10 Palladium Facts?
    Palladium bars
  7. Palladium is the shiny, silverish element that makes white gold that unique color. It also has a very similar color to silver, making it popular with jewelry makers. Premium white gold combines gold with palladium. That is what gives off the beautiful white sheen of engagement rings and mothers’ rings, which are made from white gold using palladium. Additionally, because of its high level of purity, palladium-made jewelry is hypo-allergenic.
  8. Palladium was first discovered in 1802 by an English chemist named William H. Wollaston. He found it by examining residue left after dissolving platinum in aqua regia, a mix of hydrochloric and nitric acids. He was able to isolate the palladium during a series of chemical reactions. In an unusual manner, Wollaston introduced his discovery by dropping off a quantity of the metal with a local mineral dealer and then posting anonymous signs in the city that described the new metal’s features. Wollaston named palladium in 1802 after the asteroid, 2 Pallas, which scientists discovered just a few months prior to Wollaston’s discovery.
  9. Palladium was once viewed as a worthless by-product of platinum mining. Today, however, investors view it as one of the top precious metals in the world. During 2019, the price of palladium doubled, making it the highest-priced precious metal, even beating out gold.

    Now, palladium is an essential element for cleaner running automobiles. Other uses of palladium include in the following industries: electronics, medicine, dentistry, chemical applications such as groundwater treatment, and jewelry making. Palladium is also one of the key components of fuel cells, which use hydrogen and oxygen to create electricity, heat, and water. Some of the most widely used applications of industrial palladium include producing blood sugar test strips, aircraft spark plugs, surgical instruments, classical flutes, and watches. Another important application of palladium is in the electronics industry, where it is used for manufacturing multilayer ceramic capacitors for circuitry.

  10. People can invest in palladium in at least 5 different ways. Most investors are familiar with precious metals investing through the purchase of the physical product via online sources. And palladium is no exception. It’s available from several government mints in the form of coins, collectibles, and bullion bars and rounds. Some of the more informed investors gain exposure to palladium through Exchange Traded Funds (ETFs) and derivatives products like palladium futures.

    Investing in palladium-related stocks, such as a basket of precious metal assets, is another option for investors. The latest new way to invest in palladium is through a stable coin like Palladium Coin, which is a cryptocurrency that is pegged in value to another asset, in this case, palladium. This array of investment choices ensures that investors, no matter their level of experience or bank balance, have a way to gain exposure to this interesting precious metal.

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