If you’re not familiar with Palladium, Palladium is a relatively new precious metal, not having the long history like gold and silver. One very appealing fact about Palladium is just how rare it is, it’s very rare, being some 15 times rarer than Platinum which is rarer than gold. That said, Palladium is a very thinly traded metal, with less volume and that in itself makes it much more volatile than gold and silver.
In case you’re not aware Palladium was at about $2300 a troy ounce in early 2020, then as the pandemic hit, it dropped pretty significantly, and this would be primarily due to decreased industrial demand. Now today, Palladium is anywhere in that $900 -$1100 range per ounce, and some even think it could fall below $900.
In terms of usage, Palladium, like Platinum, is used heavily in automobile catalytic converters. And if you remember there was a massive decrease in auto production in the pandemic which decreased the need for those catalytic converters.
As the auto market began to recover, there was increased demand for those catalytic converters and hence palladium, the price, shot up. In spring 2022, the palladium price dropped again, and this had to do not just with the auto market, but with recession fears and rate increases. So, generally the palladium price, we can see palladium tends to fluctuate quite a lot.
Also, another factor that is hurting palladium is the climate change initiative, as more auto companies push out electric vehicles, that demand for catalytic converters is declining and thus hurting price.
So, what it’s in store for Palladium? I believe that it’s tough to predict. To me, IMO, Palladium because it is so rare definitely has a floor price. Now there aren’t really questions about the supply. Supply is very low, and will remain low, due to its rarity, which is good for the price and anyone who stacks this.
The questions that I have is on the demand side. I don’t think gas or diesel engines are going away anytime soon, but I do think that their share of the market is going to be reduced. That said, I think that science is going to find more useful ways to use Palladium, especially if the price stays lower.
Now due to the green energy initiative, many analysts are extremely bearish on the metal, but again I think they are underestimating the uses.
If you stack Palladium, please let me know any other popular uses you’re familiar with.
