BUY PALLADIUM
Palladium remains one of the least recognized and least understood of the four major precious metals.
Discovered in 1803 by British chemist William Hyde Wollaston, palladium (Pd) is a rare, soft, white metal. It belongs to the Platinum Group Metals (PGMs), which also include iridium, osmium, platinum, rhodium, and ruthenium. Renowned for their chemical stability, PGMs play vital roles as catalysts in numerous industrial processes.
Palladium’s primary application is in catalytic converters, accounting for 80% of its demand. These converters help reduce toxic emissions from traditional internal combustion engines. Palladium is also used in fuel cells, hydrogen storage, electronics, jewelry, medical devices, and dental fillings.
Emerging economies like China and India, with growing middle classes and stricter emission standards, have driven demand for palladium. However, supply constraints, including limited reserves, geopolitical instability in South Africa and Russia, and a lack of significant new mining projects, have restricted production. Palladium is over 30 times rarer than gold, making its supply highly constrained.
| 2023 | 2022 | 2021 | 2020 | |
|---|---|---|---|---|
| Russia | 92,000 | 87,000 | 74,000 | 93,000 |
| South Africa | 71,000 | 73,100 | 80,000 | 73,500 |
| Canada | 16,000 | 16,100 | 17,000 | 20,000 |
| Zimbabwe | 15,000 | 14,300 | 13,000 | 12,900 |
| USA | 9,800 | 10,100 | 14,000 | 14,600 |
WHY IS PALLADIUM SO AFFORDABLE?
Palladium has demonstrated impressive investment performance before 2022, as it achieved significant gains, including 40% in 2017, 19% in 2018, and 54% in 2019, with record highs surpassing $3,400 in March 2022. Rising automotive demand, particularly during the COVID-19 pandemic, contributed to its growing value leading up to 2022.
However, palladium’s high cost prompted many manufacturers to switch to platinum for catalytic converters, reducing demand for palladium. This decline was further amplified by the rise of electric vehicles (EVs), which do not require catalytic converters. Consequently, palladium’s value decreased throughout 2023.
In a nutshell, palladium prices have dropped due to
- Increased output from Russia,
- Reduced automotive demand linked to EV adoption,
- Platinum’s growing role in catalytic converter production.
These factors have made palladium far less expensive than just two years ago. Despite these challenges, falling prices may make palladium a more attractive option for automotive manufacturers in 2024 and 2025. As catalytic converter producers turn to palladium as a cost-effective alternative, demand could surge, potentially driving prices higher.
HOW TO BUY PALLADIUM?
Palladium is available in both coin and bar forms and can be purchased through reputable dealers like Constitutional Gold Group. Government-issued palladium coins, such as those from the U.S. Mint and Royal Canadian Mint, are widely available. Renowned mints like Valcambi, PAMP Suisse, and Credit Suisse also produce palladium bars.
IS PALLADIUM A GOOD ADDITION TO YOUR PORTFOLIO?
While palladium lacks the monetary history of gold and silver and has not traditionally been a safe-haven asset, it offers diversification and exposure to unique market fundamentals. Including palladium in a precious metals portfolio can reduce volatility and enhance growth potential.
The fundamentals of the palladium market remain strong, even after recent price declines. Physical palladium provides a tangible, private asset that can act as a hedge against inflation.
Your Account Representative at Constitutional Gold Group can guide you through the process of investing in palladium, ensuring a secure, straightforward, and private transaction tailored to your goals.