So, what’s going on with palladium?

So, what’s going on with palladium?

Palladium is a rare silvery white metal discovered in 1803 by William Hyde Wollaston. He named it after the asteroid Pallas, which was itself named after the epithet of the Greek goddess Athena, acquired by her when she slew Pallas. 

More than half the supply of palladium and its congener platinum is used in catalytic converters, which convert as much as 90% of the harmful gases in automobile exhaust into less noxious substances. Palladium is also used in electronics, dentistry, medicine, hydrogen purification, chemical applications, groundwater treatment, and jewelry. Palladium is a key component of fuel cells, which react hydrogen with oxygen to produce electricity, heat, and water.

So, what’s going on with palladium?

The dental industry actually makes up a very small portion of the global demand for palladium. The major player in the palladium market is the auto industry. Nearly 80% of all palladium demand is from the global auto industry. Just for a little perspective, in 2017, China sold 28.88 million cars. That’s a lot of cars!

Palladium got another boost over the weekend with the U.S. and China signaling progress on ending their months-long trade dispute. Some analysts think a deal could help stabilize demand from the auto sector, and many expect supply to decrease from producers like Russia and South Africa. There is such a shortage of the material that the industrial users can’t really get a hold of it.

Palladium has climbed to record highs. Prices are up more than 25% since the start of August and about 10% for the year, making the metal one of the market’s best-performing assets of 2018. Projections showing supply shortages and steady auto demand.

The small palladium market is also prone to monster swings, so some traders are bracing for a sharp decline if trade setbacks or higher supply shift the outlook.

For the moment, we don’t see anything changing, the metal remains in demand for industrial uses, speculators are covering their positions, lease market is very tight, and palladium forwards are in backwardation. We could see some higher prices from here in the very short term. However, a few analysts said palladium’s rally could run out of steam, and there could be profit-taking at these high levels.

The precious metal hierarchy goes like this:

Gold is the “Perfect 10” of precious metals.

It’s the metal of kings and real money. Gold is the basis for sound money. Gold has long been a measure of wealth, and it is still coveted the world over by Central Banks and smart investors.

Some investors have counted gold out over the years, only to be proved wrong. Some analysts remain optimistic bullion can rebound after signals last week that the Federal Reserve might not be as aggressive with interest-rate increases moving forward.

Next is silver:

Historically the value of silver has been measured as a ratio to gold of 15:1, silver, like gold is also real money. The Coinage Act of 1792 when America created its first currency system proclaimed as much. Silver coins were set at a value of 15:1 to our gold coins and that ratio remained for 200 years. Currently the gold/silver ratio sits at 85:1 making many feel silver has big upside potential.

Two much rarer metals are platinum and palladium, (PGM – platinum group metals).

Platinum is much rarer than both gold and silver — so rare, in fact, that all of the platinum ever mined would fit into your living room.

And palladium is even rarer than that. 

LCR Coin offers Palladium in the form of 1 oz Canadian Palladium Maple Leaf and next year the U.S. Mint has announced the release of the bullion version of the 1 oz Palladium Eagle. These coins will likely be in high demand and deliveries will start in early April. Call if you are interested to find out more about these palladium products at 800-830-5578 or email info@lcrcoin.com.

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