Despite the high spot price of palladium as well as its many benefits, few people know just how incredible this precious metal can be. There is a whole lot to gain from palladium for prospective investors, and choosing to go with this metal over gold or silver may actually be a pretty viable decision.
In this article, we will be telling you everything you need to know about palladium before investing, as well as going through a few of the most notable points as to why you might want to give this underrated metal a try.
What Is Palladium?
Before diving into any of the details, we first need to go over exactly what palladium is. Palladium is a metal not too far removed from other precious metals of its calibre like gold or rhodium, but unlike its contemporaries, it cannot be mined in of itself.
Palladium is actually a rare byproduct of mining other precious metals such as platinum and nickel, and the fact that it cannot be mined directly is one of the factors that make it so incredibly sought-after.
Moreover, palladium only has a small chance of appearing when mining other ores, yet again increasing its rarity exponentially. Just these two factors alone are enough to make palladium special, and the fact that there is no sure-fire/consistent way of obtaining it makes it incredibly hard to get ahold of.
However, when you pair its low availability with its high number of uses throughout a plethora of industries, you can begin to see why this metal is one of the most expensive in the world.
Palladium has a variety of uses, with its main purpose being in the automotive sector. Palladium is needed to make catalytic convertors – a component that is vital for the proper functioning of a car. On top of this, palladium is also used in electronics, dentistry, and jewellery to a lesser degree.
All of these points put together make palladium incredibly valuable both due to its rarity and various applications in a number of industries, and as you would expect, any prospective investors looking to get ahold of some will have to be willing to pay a pretty penny.
A Metal More Sought-After Than Gold
Most people think that gold is the most expensive/luxurious metal. However, this could not be further from the truth. There are a plethora of other metals out there that are more sought-after than gold, with palladium being one of the prime culprits.
Palladium is more precious than gold for a variety of reasons, many of which we discussed in the previous section. This can make getting into the palladium trade an expensive endeavour, and it may not be the best choice if you are new to the industry or a beginner investor.
Whilst the price of Palladium is in constant flux, it is almost always pricer than gold – if you have tried your hand at investing in precious metals before, you may be aware of just how steep of a price this entails.
Of course, those who can afford to get into palladium are usually more than rewarded, and the earnings potential from this metal is much higher than most of its contemporaries. This is even more so the case as of late due to shortages in palladium, making the metal an exceptional asset with extraordinary potential.
If you are thinking about investing in palladium, you first need to think about whether or not you have the excess capital to spare on such a venture. Getting into this trade is going to be incredibly costly, and whilst it may be able to give you better-than-average returns, it may not be a good idea if you think you will need said capital in the near future.
High Demand, Low Supply
At this point, we are already fairly certain that you can already guess why demand is high for palladium. Its rarity and multiple uses throughout a variety of sectors make it incredibly valuable, and there are few metals out there that are as integral to society as this.
However, on top of palladium’s already dwindling supply (due to it being rare and having no guaranteed methods for extraction), there is somewhat of a shortage at the moment, with production being drastically slowed down throughout a plethora of countries.
This presents a prime opportunity for investors, and the increasing rarity of palladium is making its price skyrocket every year that passes. The sooner you are able to get in on palladium, the better.
We hope we were able to give you a much better idea as to what investing in palladium entails as well as what sets it apart from other precious metals of a similar calibre. Palladium has the potential to be an incredible investment, and it would be a boon to any investor’s portfolio.
Although, as is the case with anything, there is no guarantee that investing in palladium will net you a profit. As long as you are able to accept the risks involved, palladium is a great asset, and there are few other investments that have as good of an ROI as this.
