Palladium – Is This a New Investment Opportunity for 2018?

Talk to people about investing in precious metals and many will think that gold and silver are the only options. There are actually far more precious metals that can be bought and sold for an investment. Rhodium and platinum are two examples. Another precious metal, also a member of the same group of metals known as the platinum group, is palladium.

What is Palladium?

Palladium is a very rare metal that is a lustrous, silvery-white colour. It was discovered by William Hyde Wollaston, in 1803. He decided to name his discovery after the asteroid Pallas. All the metals in the platinum group have similar chemical properties, Palladium is slightly different in that it has the lowest melting point and is the least dense. This metal is commonly used in catalytic converters. It is also used in a number of other industries such as medicine, dentistry, electronics and hydrogen purification. Jewellery makers are also starting to realise its potential. Finding a deposit of palladium is a rare occurrence, but they have been found in South Africa, Montana, Canada and Russia. As well as being mined it is also sourced via recycling. The fact that this metal is so useful and in limited supply, makes it a wonderful investment opportunity.

The Supply of Palladium

In 2016, annual mining produced only 6.7 million ounces. Russia accounted for 41%, while South Africa accounted for 38.1%. A further 2.5 million ounces were added, thanks to recycling efforts. Stocks of palladium vary from 7 to 26 million. This equates to between 1 and 4 years of mining. It has been projected that the total supply of this metal is only likely to increase by 1%, possibly a little bit more.

The Demand for Palladium

Figures from 2016 show that the automotive industry was the biggest user of palladium, at 84.3% of the total demand of 9.4 million ounces. Industrial use accounted for 20.6%, and jewellery took 2% of the total. As you can see from these figures, demand outweighs supply. This is a good situation for anyone looking to make an investment. It is likely that global demand will continue to increase, which means the price of this metal will be supported.

If you want to know more about palladium and its usefulness as an investment Indigo Precious Metals can provide it. Along with the latest prices of all the most popular precious metals.

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