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IPMI and Industry News: Palladium Market News

Should You Invest in Palladium?

Tuesday, September 22, 2020   (0 Comments)
Posted by: Matt Watson
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Should You Invest in Palladium?

This precious metal can help diversify and hedge overall portfolio risk.

Macro image of a one ounce Palladium bar

Palladium is a precious metal that is mainly found in Russia and South Africa.GETTY IMAGES)

PALLADIUM IS A PRECIOUS metal mined and produced globally with several industrial uses.


Even though investor demand is small, the price of palladium has been outperforming other metals in recent years.

Investors looking to diversify investments or seeking an inflation hedge against the U.S. dollar may be interested in adding palladium to their portfolio. Here are a few things to know:

  • What is palladium?
  • Ways to invest in precious metal.
  • Palladium's historical performance.

What Is Palladium?

Palladium is a precious metal, often compared with platinum, which has various applications in the chemical and electrical industries, jewelry and dental fields.

The precious metal is mainly found in Russia and South Africa, with some deposits located in the U.S. and Canada. There are only a handful of companies that manage the production and manufacturing of precious metal globally.

Palladium's demand mainly comes from its use in the automotive sector in its production of the catalytic converter, an exhaust emission control device that minimizes pollutants in cars. Despite the setback the automotive industry has seen as a result of the pandemic, the supply of palladium is on a decline amid continued demand in the global auto market.

"There has been consistent growth for palladium in the past four years driven by increased demand due to increasingly stricter pollution laws, meaning manufacturers are having to increase the amount of palladium used in each catalytic converter," says Sukhi Jutla, co-founder and chief operating officer at MarketOrders, a London-based business-to-business platform that connects gold jewelry retailers to suppliers and manufacturers of gold-related items around the globe.

With environmental standards increasing, the need for the precious metal may persist. Massive automobile markets such as China, which has a national air pollution action plan to regulate emissions, and the U.S., which has taken federal action to address climate change concerns, dominate the auto industry in global sales annually. This means these automobile devices will be in high demand, as well as their fundamental component: palladium.

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