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Investing in Palladium

Palladium is a silver-white precious metal that is found in the periodic table and has widespread use in the automotive industry because of its catalytic properties, in electronics due to its conductive properties, in dentistry for its inert qualities, as well as in jewelry for its lustrous shine and workability.

The majority of palladium, roughly 85%, is mined in South Africa and Russia with the remaining amounts coming from U.S. and Canada.

Due to its demand in these sectors and its relatively low supply palladium has become a valued investment taking its place among the other precious metals such as gold and silver.

The price of palladium fluctuates day by day or even minute by minute based on the demands and changes within these markets. The current price at any one moment in time is called the spot price and similar to stocks can be bought and sold immediately, all you need is access to the trading floor via a broker.

How to Invest in Palladium

1.    Exchange-traded funds 

Palladium Exchange Traded Funds hold physical palladium secured vault locations and offer investors the ability to take advantage of the fluctuating spot prices over time. Investors can purchase and sell these funds as they would a common stock option as Palladium ETF’s trade on public stock exchanges. This is probably the easiest way for beginner investors to get into the precious metals game because it doesn’t require additional knowledge outside of what they may already know from investing in stocks.

2.    Futures

This form of investing and requires complex knowledge of how a commodity will behave in the future based on global supply and demand. A Futures contract allows the investor to buy or sell the commodity at an agreed-upon price in the future. For example, the current spot price of palladium, May 11, 2018, is $996.10 per 1 Troy ounce. Let’s say that an investor by doing careful research speculates that the demand for palladium will increase in the near future while the supply will remain relatively constant thereby raising its price would offer to buy for the current price understanding that they will earn a profit down the road. However if the price of palladium drops then the investor will have to honor the contract and agreed upon and higher spot price.

3.    Stocks

One way to buy stock is to invest in publicly traded companies that are mining palladium. Infomine.com has an extensive list of publicly traded metal mining companies that you can use to begin your research.

4.    Physical assets

The investor also has the option to simply by physical assets in bars or coins from precious metal dealers. However unlike ETF’s, Futures, or stocks the owner of the physical assets has to provide secure location to keep the physical assets. It also becomes more of a burden to sell or trade at a later date and time. The upside is that the investor has direct ownership of the commodity

Investing in precious metals is another way to diversify your portfolio and rely on the relative stability of the value that comes with owning a physical and tangible asset. While gold is the ultimate standard of a precious metal that has withstood the test of time and holding its place as a valuable currency despite the ups and downs of human societies, other metals such as silver, platinum and palladium can substitute as viable alternatives.

Also read my guide on how to get started investing in gold.  You’ll find many more people invest in gold, compared to palladium.

Tim Schmidt

A Florida-based Entrepreneur, Author, and Life Hacker, Tim Schmidt decided to take control of his retirement portfolio several years ago by setting up a self-directed IRA. This blog shares his thoughts and opinions on the top of retirement and investments. You can follow his career and travels on his Official Website as well as on his Instagram page.