What Is Palladium, Its Uses, How to Invest in the Metal
Of late, there has been a high demand for palladium, a metal primarily found in Canada, South Africa, and Russia. It has led to many questions like: ‘What exactly is palladium?’ ‘How much is it worth?’ and ‘What is it used for?’ We’ll answer these and more questions in this post.
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What Will I Learn?
What Is Palladium?
Palladium is a glossy and silvery rare metal, with the atomic number 46 on the periodic table of elements. It is utilized in many different production processes, especially for electronics, the automotive industry, and other industrial products. It also has applications in jewelry, dentistry, medicine, chemistry, and groundwater treatment.
Palladium is quite rare, in fact, it is said to be 30 times rarer than gold. It is mostly produced by mines in the United States, Canada, South Africa, and Russia. Here are some quick facts about palladium before we look at the nitty-gritty:
• Palladium is a rare metal used in making industrial and electronic goods.
• It belongs to a group known as the platinum group metals along with osmium, iridium, ruthenium, rhodium, and platinum.
• It is 30 times rarer than gold.
• Most of the world’s supply of palladium comes from Canada, the U.S., South Africa, and Russia.
• Since palladium was widely used in the 1990s, its price has dramatically climbed.
• Palladium can be rolled into sheets that are employed in solar energy and fuel cell applications.
Understanding Palladium
Palladium is strongly resistant to corrosion in air (oxygen) and to the action of acids. It is also extremely malleable and tarnish-resistant. These and many other properties make it important in numerous cutting-edge technologies, including fuel cells, catalytic converters, and other electrical systems. Investors have become interested in it as a commodity because it is not easy to substitute.
Palladium is a rare metal belonging to the platinum group metals (PGMs). As mentioned before, you’re 30 times more likely to come across gold than palladium. This rarity has seen its hike in price, coming from a record low of $41.70 in August 1977 to an all-time high of more than $2,981 in February 2022!
But the price didn’t rise exponentially in a straight graph. From around 1986 to 1996, the price of palladium varied between $100 and $150 per ounce before skyrocketing in 2001. From 2001 to 2016, the price of palladium fluctuated more than it had in the past and the trend continued as demand increased. After that, it began to grow consistently until it reached the $1,500 threshold in February 2019.
In 2021, palladium was mined at an excess of 200 metric tons. At 80 metric tons, Russia was the most productive while South Africa came in second with 74 metric tons, and Canada came in third with 17 metric tons. Zimbabwe produced 13 whereas the United States produced 14.
History of Palladium: How Was Palladium Discovered?
Palladium was discovered by William Hyde Wollaston in 1802. He dissolved platinum in a solution of nitric acid and hydrochloric acid, only to stumble upon the discovery by chance. He gave the residue he found a name, Pallas, after the asteroid, and secretly sold it and promoted it as the next silver instead of sharing his discovery.
Wollaston was soon however compelled to report his discovery to the Royal Society of London because other scientists insisted that palladium was simply an alloy of other metals. It then gained popularity and was used in curing tuberculosis, but because it had unfavorable side effects, this practice was discontinued.
In 1939, palladium was used to make jewelry. Although palladium was first used in jewellery in 1939, it wasn’t until the late 1980s that its use became more widespread. Along the way, automakers also began using it in catalytic converters. Today, it is used in a huge range of goods and sectors, including dentistry, watchmaking, computers, photography, electronics, and hydrogen purification.
Also Read: What Does Gold Filled Mean in Jewelry?
Palladium Applications
Palladium is used in jewelry, dental fillings, fuel cells, electronic components, catalytic converters for cars, and other applications. They are however mostly used in catalytic converters which contain different levels of palladium depending on the type of car. In most catalytic converters, however, two to seven grams of palladium are often utilized.
Top 4 Benefits of Palladium
1). Outstanding Jewelry
Palladium was initially used in jewelry in 1939. When mixed with yellow gold, the alloy creates a metal that is more durable than white gold. King Taufa Ahau Tupou IV’s coronation was commemorated on circulating palladium coins that Tonga’s government released in 1967. Since then, the usage of palladium in coins has never been seen again.
2). Durable and Harder than Gold
Palladium is harder and more resilient than gold, but it is also more expensive per ounce. Since it is 12.6% tougher than platinum, this gleaming metal is also more durable than platinum.
3). Flexibility/Malleable
Palladium may be worked into sheets as thin as 150 thousandths of an inch. Pure palladium is extremely flexible, but working with it at room temperature causes it to become stronger and harder. The sheets are then employed in projects like fuel cells and solar energy.
4). Great Catalyst
Palladium is used most frequently in catalytic converters since it is an excellent catalyst and speeds up chemical reactions.
Investing in Palladium: A Guide
Looking to invest in this rare metal? There are several ways to gain exposure. Here they are:
• Palladium-Focused Exchange-Traded Funds (ETFs)
It’s one of the easiest solutions to investing in palladium bullion. Some good choices include the Aberdeen Physical Palladium Shares or the Sprott Physical Platinum and Palladium Trust. These ETFs hold physical palladium so you can avoid having to keep the metal yourself while still having exposure to its price.
• Palladium Bullion
The alternative to investing in palladium is to buy the metal itself in the form of bullion. While it’s a simpler form of investment, you incur the extra cost of storage and transportation.
• Palladium Stocks
Buying the shares of businesses engaged in the palladium industry—typically its mining and sale—is an additional option to investing in the metal. While mining businesses often mine a variety of metals rather than just one, you would likely be exposed to more metals than just palladium in this situation. This makes it challenging to concentrate solely on palladium.
Palladium: What Is It Worth Now?
Palladium costs slightly more than $1,442 per ounce as of today’s publishing date. Since the middle of the 1990s, the price of palladium has been rising continuously, with the exception of dips in 2003 and 2008.
Final Thoughts
Palladium is a rare metal that is most y found in Canada, South Africa, and Russia. It is more durable than platinum and has several applications, including the automotive industry, manufacturing, and electronics. Since palladium was widely used in the 1990s, its price has dramatically climbed. Palladium investments can be made physically or through exchange-traded funds (ETFs).
About Arthur Karter
Hi, I’m Arthur, and nobody wants to wake up in their 50s like me that they are in serious debt with minimal assets. This wake-up call forced me to reevaluate everything. After going through the school of Hard Knocks, I’m ready to help you by sharing the best retirement choices and how they differ from all the same-old, same-old options that financial advisors sell. These alternatives will help you build and protect your wealth.
