Palladium, the Secret Investment
Palladium, for many people, is simply a cheaper alternative to platinum. There is however, more to palladium than meets the eye, especially when it comes to investment.
Palladium was discovered by an English Chemist, William Hyde Wollaston in some ore which had been brought to England from Brazil, it was named after the asteroid 'Pallas' which had been discovered the previous year. "Palladium" references Pallas Athena, the Greek goddess of wisdom.
These days over 90 percent of the current palladium comes from Russia and South Africa with small amounts being found in Australia, Canada and the US.
Palladium is used extensively in catalytic converters, dentistry, watchmaking, aircraft parts, surgical instruments and electrical parts and, as with gold and silver, this rare precious metal is also minted into bullion for investment purposes, as well as being struck into coins.
According, to a Global Auto Report by Scotia Bank not too long ago, 63 percent of all palladium is used in the auto industry, and with car sales in the world's largest emerging markets, China, India, Brazil and Russia, all about to set new records in the coming years, palladium is going to be in ever increasing demand. Even U.S. and Canadian sales are starting to advance again.
Fatih Birol, the chief economist for the International Energy Agency (IEA), pointed out that 700 out of every 1,000 people in the United States and 500 out of every 1,000 in Europe own cars today. But the new emerging auto market in China where only 30 out of 1,000 own cars currently, Birol thinks that figure could jump to 240 out of every 1,000 by 2035. That is a massive hike and an incredible boom to the palladium industry.
What IS Palladium?
Palladium is a rare silver-white transition metal of the platinum group and resembles platinum with many of the same properties including resistance to corrosion.
Palladium is less dense than platinum, softer and more ductile and tends to be favoured more by jewelery manufacturers for its ease in fabrication.
But the main use of palladium today is in catalytic converters. A lot of research is currently in progress to discover ways to replace the much more expensive platinum with palladium in this application.
It also has the curious ability to soak up vast quantities of hydrogen, useful in cold fusion and fuel cell research.
Similar to gold, palladium can be beaten into a thin leaf form as thin as 100 nm (1/250,000 in). Since 1939 palladium itself has been increasingly used as a precious metal in jewelry as well as palladium coins.
And for those allergy sufferers, allergy free palladium jewelery is something well worth looking out for. Palladium has a number of advantages over white gold, for example, in that it is hypoallergenic and does not cause the same reactions as white gold. In other words, less people have any kind of allergic reaction to palladium whereas they might do with white gold and almost certainly do with other metals such as nickel for example.
Investing in Palladium
When it comes to investment, palladium has often been considered the poor man's platinum. But this bright metal should not be dismissed so lightly as it promises to be an excellent and fruitful investment in the future.
Consider the following. Over the past four years the price of palladium has jumped three times from a range of 200 dollars an ounce up to an average range of 600 dollars per ounce. There are two main suppliers of palladium, Russia and South Africa with more than half of the world's annual supply originating from Russia.
Used as an alloy in jewelry, especially in the production of white gold, Palladium is relatively inexpensive and easy to work and, as a result, becoming more popular by jewelry manufacturers.
For investment purposes, most palladium investors purchase palladium in the form of bullion bars or coins.
The best bullion bars are considered to be the Credit Suisse or PAMP one-ounce bullion bars, containing 99.95 percent palladium. This is the industry standard for palladium bullion bars sold into the investment market. Credit Suisse and PAMP are two of the most well known precious metal names in Europe.
Palladium coins, also very popular, were first struck in 2005 by the Royal Canadian Mint. The Palladium Maple Leaf coin, according to the CMI Gold & Silver website, contains one ounce of 99.95 percent of pure palladium and can be used as $50 legal tender in Canada.
The good news for palladium investors is that palladium coins often carry a lower premium than the palladium bullion bars so investors who are interested in investing in palladium might want to consider buying palladium Maple Leaf coins dated from 2005, as they could easily achieve future collector status.
"The first run of Palladium Maple Leaf coins were limited to 40,000 and were dated 2005 (minted early November 2005). This means that 2005-dated Palladium Maple Leaf coins probably will turn out to be a small mintage relative to years during which the coins will be minted for twelve months." according to the CMI Gold & Silver website. It goes on, "Therein lies a unique opportunity for the palladium investment community." Probably accumulating a few palladium coins and bars on a regular basis might be the wisest move when it comes to investing in palladium.
Palladium could well be one of the most fruitful investments of the future.
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