When investing, you need to understand the concept of diversifying your portfolio. For a high return on investment, consider investing in various assets such as securities and tangible assets. Palladium is one of the tangible assets that can help diversify your investment portfolio. You can use Palladium as security against market uncertainty, currency devaluation, geopolitical risk, inflation, etc.
What Is Palladium?
When it comes to buying precious metals, many investors tend to go for gold and silver. But, Palladium is a great option that provides impressive trading opportunities. Palladium is not connected to any government compared to regular currency, allowing you to sell, buy, and trade this precious metal. Also, it is easy to store these bullion bars and coins, which gives you a physical asset in your portfolio.
Palladium comes with two primary functions in the world; as a precious metal and industrial metal. Most of its supply is being utilized for the production of autocatalysts for gasoline-engine cars. Also, Palladium has limited production in mining, causing its prices to be volatile. With this, this precious metal offers unique investment opportunities.
Drivers of Palladium Prices
While Palladium is a rare commodity; it does not always shift simultaneously. But, Palladium performs well in an economic boom due to its wide range of industrial applications. Several factors affect the price of this precious metal, which includes:
- Prices of gold and platinum. More than a decade ago, Palladium was less costly than platinum. Today, it is more affordable than platinum and gold. The rising costs of precious metals may cause industrial users to turn to cheaper alternatives like Palladium.
- Technological developments. In recent years, large amounts of Palladium are being recycled due to the advancements in the recycling process. These improvements could bring about downward pressure on the costs. In addition, the continuous development in automobiles has put the pricing equation of Palladium in uncertainty.
The advent of electric cars may reduce the need to use catalytic converters. As a result, this also negatively affects the need to buy platinum. One of the major aspects of fuel cell technology is Palladium. This technology uses a process that can create water and electricity by incorporating oxygen and hydrogen.
- Condition of the auto industry. The health of this industry can impact the price of this precious metal, considering the automobile industry has an important part in the demand for Palladium worldwide. Higher production of automobiles often signifies a higher demand for this precious metal. On the other hand, difficult times for the auto industry can also impact the prices of Palladium.
- In the past, people only used platinum in catalytic converters for diesel. New technologies today allow you to use Palladium at about 25 to 50%. Some manufacturers of vehicles use Palladium instead of Platinum for various reasons.
Buying Palladium is one way to improve your investment portfolio. To enjoy the benefits of Palladium investing, it is essential to have a clear understanding of the process. With this, you can proceed with the transaction more comfortably and confidently. Go to a reputable and legitimate dealer to ensure a total cost, including delivery fees, commissions, and other related charges. Also, an authorized dealer can provide you with physical delivery quickly and smoothly.