Despite not being as popular as gold and silver, palladium remains a persistent attractive investment in the commodities market. Found mostly in the caverns of Russia and South America, it is mined for its unique chemical component used to make catalytic converters in automobiles—said to consume more than 70% of the global supply of palladium. This precious metal is also minted to make aircraft spark plugs, coins and as important components of surgical instruments, jewelries and even fuel cells.
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History of Palladium
The discovery of palladium is a recent event if you will compare it to gold and silver. William Hyde Wollaston, an English chemist and physicist, first recognized the new noble metal in July of 1803 but only came out publicly as its discoverer in 1805.
Global demand for palladium soared from 100 tons in 1990 to more than 300 tons in the early 2000's. 222 tons of these was sourced in Russia. Named after the asteroid '2 Pallas', which in turn was named after Pallas, the Greek Goddess of Wisdom, palladium was first incorporated into jewelry-making in 1939. When mixed with yellow gold, it helps forms a sturdy metal found to be stronger than white gold.
What Affects the Value of Palladium?
Similar to other precious minerals, the price of palladium is constantly changing and even to a point when it became more expensive than gold in the market. To help you decide whether to invest on this precious metal, make sure to understand that these following reasons play a vital role in driving up and down its market value:
- Car Industry Demand: Since 70% of palladium's supply is used to make an automobile's catalytic converters, one must expect that any changes in the auto-industry market demand will play a bearing in influencing its price.
- US Dollar Market: Because it is mostly bought from suppliers using US dollars, any fluctuation in the value of the US dollar will create a snowball effect in the trading of this metal.
- Substitution: Due to the soaring prices of this commodity, carmakers are now trying to come up with innovative ideas to substitute the use of palladium in the auto industry, with other metals such as platinum. Despite this, many agree, especially the ones in the auto industry, that palladium is a hard-precious metal to replace.
- Global Political Climate: As we all now know, majority of this metal comes from South Africa and Russia, so any political upheaval in these regions may affect its mining, production and export.
Ways to Invest on Palladium
Because it is hard to buy directly an actual metal, you can invest on palladium via these other options:
- Commodity ETFs: This market invests on precious metals and petroleum. This is where investors get to purchase gold, silver, palladium in a liquid manner without needing to buy an actual physical commodity.
- Certificates: You can invest on precious metals by owning some through a proof of certificate. It is like having a physical ownership without having the need for a vault.
- Common Stocks and Mutual Funds: You can invest on precious metals like palladium using this option. Best to invest on this by letting experienced fund managers handle this investment part for you.
- Futures and Options: This market provides more leverage and liquidity to investors capable of betting big on precious metals. Both potential profits and losses are driven by derivative products.
- Bullion: Going the "bullion" way gets you to actually holding a minted bar of gold, silver and palladium in your own hand. Unless you have a safe place to keep your bullions, best to stick with the liquid investment choices.
Characteristics of Palladium
While most people are already familiar with the physical appearance of gold and silver, palladium is a mystery to many. To get an idea of how it looks like, here are some of its physical characteristics:
- It appears as a silver-white metal, feels soft and looks like every bit of a platinum.
- It dissolves in Aqua Regia (“Latin Water”) when left in room temperature.
- It also dissolves when mixed with concentrated sulfuric and nitric acid.
- It is easy to manipulate and shape because of its malleable feature.
- From being soft and pliable, it hardens and strengthens when it is cooked.
How to Start CFD Trading of Palladium?
There are several ways of engaging in CFD trading of palladium. All you need to do is find a reliable broker or CFD trading platform such as eToro to open an account and deposit your fund.
Trading this commodity in eToro's CFD trading platform doesn't require any storage fees since you won't be trading any physical form of this metal.
Where to Buy/Invest/Trade Palladium?
Unless you know a trusty supplier of palladium, the most preferred means of investing or buying palladium is through the stock. More investors are using social-trading app such as the eToro CFD trading platform to not only trade and invest on the stock market, but also to invest on precious metals.
How to Trade Palladium on eToro?
- Create an account on eToro / Log-in your account for existing users.
- Click "Discover".
- Select "Commodities".
- Choose “PALLADIUM”.
- Select BUY or SELL.
- Key in your desired amount to invest or the number of palladium units you want to trade.
- Review and set the stop loss, leverage, and take profit parameters.
- Select “Open Trade”.
Palladium Price History
Historically, palladium has seen countless good days in the market trading higher than other precious minerals such as gold.
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