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Platinum Vs Palladium: What’s Really Going on?


Historically, gold and silver have been the most popular precious metal investments due to their applications in a number of industries, as well as jewelry. But in more recent times, both platinum and palladium have become valuable assets for investors to build wealth or create a balanced portfolio. In the past, platinum was the most valuable metal available, yet due to a number of factors, palladium is now the most expensive precious metal. But why? And should you care? Find out what’s really going on with these two metals to properly position your portfolio and investments.

Platinum and Palladium in the Automotive Industry

As of late February 2021, the value of platinum and palladium is as follows:

  • Palladium – $2,234 per ounce
  • Platinum – $1,240 per ounce

However, the divergence of these prices was more pronounced throughout 2020, due primarily to both metals’ applications in the automotive industry. Both palladium and platinum have become the preferred construction material for components of a catalytic converter. In addition, both have been proven to lower emissions in a catalytic converter than other available options.

The major difference in these metals is that palladium is typically used in gasoline-powered vehicles while platinum is the preference in diesel vehicles. With that said, the number of gasoline-powered vehicles is far outpacing diesel vehicles, especially with emerging markets in Asia and a transition from diesel vehicles to other options throughout Europe.

However, the skyrocketing price of palladium has also caused automakers to select platinum instead of palladium, especially when the metals were almost at a price difference of three to one (platinum to palladium). Since mid-2020, the price has continued to rise for platinum, as its demand has steadily increased. While this trend continuing isn’t certain, this may be the time to take advantage of price differences in both metals.

Why Are Platinum and Palladium So Expensive?

Gold and silver may always remain the main choices for investors, simply because their prices and supply/demand are far less volatile. But if you have the option to invest in platinum or palladium and can stomach the often-gut-wrenching price fluctuations, both of these precious metals are a savvy addition to your portfolio.

So why are these two metals so expensive? It’s all about the supply. Only about 160 tons of platinum and about the same amount of palladium are mined each year compared to 1,500 to 2,000 tons of gold mined annually. This marked difference between the metals ensures that the price of platinum and palladium remains high compared to other precious metals.

Speculative Profits of Platinum and Palladium

With a rapidly evolving automotive industry and highly volatile markets, is now the time to add platinum and palladium to your portfolio? The answer lies in your willingness to risk. Because of the need for platinum and palladium in modern cars for the foreseeable future, demand might remain high for years to come. And while platinum has a lower price, the perfect time to buy is right now. Add in the all-time high price of palladium, and both look strong in terms of industrial applications and investments.

Whether it’s platinum, gold, silver, or palladium in bullion or coin form, we are here to help.  Buy, sell or trade with us in Newport Beach CA.  We are the Orange County dealer of choice for thousands of customers worldwide.  Contact us to book an appointment today.

 

 



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