The Three Best Ways To Invest in Palladium

invest in palladium
by: Ben Tseytlin - on Miscellaneous

Palladium, although not as well-known as gold, silver and platinum, is increasing in popularity due to its many potential applications and desirable characteristics. Below are the three best ways to invest in palladium, and the advantages investors will gain from doing so.

Palladium Stocks

One way to profit from palladium is to own stock in businesses that focus on it, namely miners. Beware; this approach is arguably the most risky of the three, since the majority of palladium is collected in places that have platinum mines. As a consequence, it is challenging to gain direct exposure to palladium itself, and mining companies and their stocks are notoriously volatile. Some of the most popular on the market right now are North American Palladium and Sibanye Stillwater.

Palladium Bullion

The first (and many investors would say the best) way to invest in palladium is to own the physical bullion. It can be purchased in the form of coins and stored in a safe at home or a vault offsite. Palladium bars are also available but are more difficult to find than coins. This approach is ideal for those who are just getting started, only want to invest small amounts and prefer keeping their metals close to them.

Palladium ETFs

Palladium ETFs (Exchange Traded Funds) are used to monitor the metal similar to index funds, but function similar to stocks on the exchange. Some of the most popular palladium ETFs is Palladium Trust and Sprott Physical Platinum.

How Does Palladium Compare To Other Precious Metals?

Like silver, platinum and gold, palladium is used in both jewelry and coinage. However, its most important use is in the automobile industry. It is frequently used within catalytic converters, which are devices responsible for eliminating the pollution created by combustion engines. It is so popular for this task that it makes up about seventy percent of the market. Palladium is also used in various chemical and electronic projects, and new uses are being found for it all the time.

Visually, palladium is a grayish/white colored metal that resembles platinum and silver. First described in 1803, it is actually related to platinum and has a chemical structure which is similar, but has a much lower melting point. Aside from catalytic converters, it is also used in dentistry, general medicine, the treatment of ground water, and plays a key role in fuel cells, since they utilize hydrogen/oxygen reactions that create water, electricity and heat. Ore deposits are exceptionally rare, but most agree that it will play a key role in technological advancement in the 21st century and beyond.

Most of the world’s palladium is found in Russia and South Africa. Unfortunately, South African mining operations have become subject to numerous disruptions over the years, due to poor extended investment and labor strikes. Also, due to the tense relationship that Russia has with the West, shortages of the metal are a real possibility in the future. Still, although there are risks involved with investing in palladium, the rewards can more than offset them.