The Palladium Market

The Palladium Market

Though it is a chemical element represented on the periodic table, many people - even many precious metals collectors - either have not heard of palladium or are not familiar with it. And if people - especially traders and collectors - do not know much about this precious metal, how can they possibly know the palladium price and the market for it? Simple: they can't.

So, just how valuable is palladium? For starters, it is roughly 30 times rarer than gold. It is a member of the platinum group metals, along with platinum, iridium, rhodium, osmium, and ruthenium. While all of these metals have similar chemical makeups, palladium is the least dense and has the lowest melting point. Because of these qualities it is considered extremely valuable to various manufacturers, especially ones that produce converters to convert harmful auto exhaust into less harmful substances.

Nearly all of the precious metals had excellent years, in terms of their value, in 2010. The weaker the economy looks, the stronger the foundations for the values of the different precious metals is. In 2010, palladium saw its highest value since 2001, when it was over $1,000 per ounce. The price in 2001 was due to a shortage in the supply of palladium, but the trend in 2010 is one that is expected to continue.

Since the supply shortage over ten years ago, the supply of palladium has been greater than the demand of palladium nearly every year. In 2010, though, the supply and demand of palladium were nearly identical. This bridging of the gap between the supply and demand points to a continuation of its increase in value.

As more and more developed countries increase their demand for palladium for producing products such as catalytic converters (for automobile manufacturers), the overall demand will increase, simultaneously increasing palladium's value. Pair this with the reports that Russia, the leading supplier of palladium, is running low on their supply, and you have all the makings of a severe spike in the market for palladium.

As the demand and supply of palladium continue to go in very different directions, many investors will be checking the palladium price at Monex regularly, to see the most effective times to cash in on their investments. If everything reported over the past year about the supply and demand of palladium is accurate and taken into account, now would seem to be the opportune time to buy "low" and watch the value increase.