How to invest in palladium
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This page details everything you need to know to make an informed investment in palladium, a precious metal with many industrial applications. Read on to get started.
Where can I invest in palladium online?
To invest in palladium in the form of digital assets like stocks and ETFs that trade on stock exchanges, you need an account with a broker. We have listed some of the best options available to you below, and you can click on one of them to get started.
Why invest in palladium?
There are numerous reasons to consider investing in palladium, and we have outlined some of the top factors for your consideration below.
- Rarity. Palladium is a much scarcer material than other precious metals such as gold, and increased demand in recent years has led to supply struggling to keep up. This has made the precious metal attractive to both institutional and retail investors.
- Store of value. If you want to store some of your wealth outside of the banking system, palladium tends to hold its value well. While it may not have quite the safe haven status of a material like gold, it remains a popular choice for value storage.
- Versatility. Palladium is perhaps the most useful precious metal, being used for autocatalysts, electronics, dentistry, medicine, chemical applications, jewelry, groundwater treatment, solar energy and fuel cells. This diverse array of uses means palladium is always in high demand, especially when the economy is healthy.
How to invest in palladium
We have broken down this process into some easy-to-follow steps for your convenience. Read through to gain an understanding of how to get involved in speculating on palladium.
- Decide on an investment strategy. Without a plan, any investment is destined for failure. So, it is important to create a clear strategy before gettiung started. Consider things like whether you want to be active or passive, and take into account how much experience you have.
- Do your research. The palladium industry is idiosyncratic, so you need to do sufficient research to understand it before investing. From reading the latest commentary by analysts to watching informative videos online, take in all of the information you can and make sure it is from a source you can trust.
- Set a budget. Without a budget, things can quickly get out of control. Setting one ensures there is a level of oversight, allowing you to take calculated risks without gambling your entire savings.
- Choose between the long term and short term. Some investors like to put their money to one side and return for a profit years later, whereas others like to trade with it to get returns faster. Both of these methods can be effective ways to generate money with palladium, and it really comes down to personal preference and how much free time you have on your hands.
- Find an investment platform. You won’t find palladium assets on every online brokerage, so it is important to shop around. In addition, you should make sure the platform you opt for has reasonable fees and proven reliability. Click the button below for our top picks.
Ways to invest in palladium
In this section, we have detailed the different routes to palladium investment. Read through them and see which option appeals to you, because each comes with its own unique qualities.
Invest in palladium stocks
Palladium stocks are publicly traded companies with dealings in the palladium space. Since most palladium is produced via mining, most palladium stocks are mining-related. You can invest in palladium stocks with most online brokers, and their performance will correlate with the price of palladium.
Invest in palladium ETFs
There are two types of palladium ETF. A palladium stocks ETF contains a basket of securities that is designed to give diversified exposure to the palladium industry. There are also palladium commodity ETFs, which are tradeable funds backed by the value of physical palladium stored securely by an institution.
Invest in palladium mutual funds
Mutual funds are created when investors combine their capital together and allow a fund manager to decide what to invest in with it. This is especially useful with a complicated industry like palladium and allows investors with less expertise to get involved more confidently.
Invest in palladium futures
Futures are a form of financial instrument that allow you to speculate on short-term shifts in the price of something – in this case, palladium. However, be aware that futures are a risky option that should only be considered by experienced investors and traders.
Invest in physical palladium
You can purchase palladium in the form of bullion, bars and coins if you want to. Provided you have somewhere safe to store your new investment, this can be a good way to get involved.
How does the palladium market work?
The palladium market is largely driven by the performance of the global economy due to the heavy industrial demand for the material. Here are some of the major factors to consider.
- Industry. Palladium is an extremely important material for many industrial practices, meaning its price performance is more affected by the economy than other precious metals.
- Autocatalysts. The vast majority of palladium demand is for autocatalysts. With around 85% of world palladium production going in this direction, the global automotive industry is key to the function of the palladium market.
- Mining. Palladium is found in deposits alloyed with gold and platinum and nickel-copper deposits, typically in mafic igneous rocks. When mining operations struggle and palladium supply dwindles as a consequence, the price of the metal can surge.
When should you invest in palladium?
Because it is the precious metal that is perhaps the closest connected to the global economy, the best time to invest in palladium will typically be in a bull market. However, while it may not have quite the safe haven credentials that gold has, its value should still hold up better than most assets in the event of a bear market.
Is palladium a good investment in 2022?
As the world continues to rebuild and rejuvenate its infrastructure in the wake of the COVID-19 pandemic, palladium is likely to be in high demand. However, it is important to do your own research and asset this in the context of your own goals and needs before deciding to get involved.
What should I do now?
Read our palladium trading guide for more on the precious metal, or click on any of the price analyses and news links below for more information.
Latest palladium news
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