Another part is that Russia refuses to reveal how much palladium they have stored and how much is mined, therefore it is unknown how much they will supply in future years. The contracts trades globally on the CME Globex electronic trading platform and have a variety of expiration months. With three-quarters of the global supply of palladium coming from two countries, there is a real possibility for supply shocks in palladium production. Similarly, the low-interest-rate environment in the United States and Europe should bode well for the automobile industry. Since most buyers finance automobile purchases, rates play an important role in determining demand.

Because of this, the chief drivers of palladium’s price are often mining related, such as the supply of the precious metal relative to its demand – something palladium traders need to keep in mind. Palladium hit record highs when supply was disrupted by Covid-19 in 2020, so the future may be bright for the rare metal. Explore some of the biggest palladium stocks to watch and why you may want to take a shine to them.

China is a leading consumer of palladium and along with its population growth could also see an increase in its consumption in coming years. If you believe that the Chinese economy will climb over the longer term then investing in palladium is a way to gain exposure to the Chinese economy. Futures are a derivative instrument through which investors make leveraged bets on commodity prices. Most investors have the vast majority of their assets in stocks and bonds. Commodities such as palladium provide a way to diversify and reduce the overall risk of portfolios. Make sure to keep an eye on our trading platform, as there may be additional ETFs to trade on in the future.

Conversely, they will sell palladium futures when they think that palladium prices will fall. Palladium prices are still 35% below their March peak, amid rising interest rates and slowing economic growth and substitution from palladium to platinum. The Federal Reserve, the world’s most influential central bank, is expected to raise the fed funds rate by 50 bps in December, after four consecutive 75 bps increases. Analysts who forecast supply-demand balances said they expected the palladium market to be balanced or in deficit this year and next year. The price of palladium was rising strongly from 2016 to 2019, and many traders took advantage of that trend in which palladium tripled in price.

Should the EV movement gain critical mass, palladium would lose its biggest demand driver. Northam Platinum in South Africa is the country’s fourth largest platinum producer and a big player in the palladium market. Whereas most other miners on our list broadly mine the 6E metals, Northam Platinum focuses specifically on palladium, platinum and rhodium. ‘Implats’, as Impala Platinum is affectionately mfi indicator crypto known, is a platinum metals mining company which takes its name from its chief mine in South Africa’s mining town of Rustenburg. Established in the 1960s, Impala Platinum is a big palladium producer with an international footprint, particularly since its 2019 acquisition of North American Palladium Ltd, based in Canada. Spread represents the difference between ASK price and BID price.

Palladium’s Industrial Use is on the Rise3

One of its principle projects is the discovery of metals, including palladium and gold, in South Africa. Ivanhoe Mines has a partnership agreement with China Nonferrous Metal Mining to explore the development and acquisition of mineral projects and opportunities in Africa. The top leader in palladium production is Russia, followed by South Africa, and North America. Palladium is part of the same metals group as platinum and they are considered to be alike. However, palladium is more common than platinum because it can also be produced via a derivative of nickel mining. Palladium is mainly used for production in the automobile industry, specifically for automotive catalysts.

Established in 2013, A-Mark Precious Metals is a company involved in the trading of precious metals. It is a wholesaler and distributor of commodities such as gold, silver and palladium bullion. A-Mark’s coin and bar segment deals in over 200 products, including palladium bars and ingots. The industrial unit of the company sells and distributes palladium to industrial and commercial users. There are many aspects influencing the demand for palladium, with one of the main factors being the car industry.

Investing in palladium

For this reason, palladium is used as a substitute when platinum supplies are short. Palladium is a by-product in the production of nickel, copper, lead, silver, gold and platinum. It occurs during the extraction of nickel and is also frequently mined together with platinum. Overall, we see continued support for palladium prices, even at the higher levels they’ve touched post-COVID. Robust palladium demand from the automotive sector is expected to continue while supply response remains persistently problematic.

You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. The biggest producers of palladium are by far Russia and South Africa (70-80% of world output) followed by United States, Canada and Zimbabwe. Palladium Futures are available for trading in London Platinum and Palladium Market and on the New York Mercantile Exchange. Between 74%-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.

Jump back up to our breakdown on ways to trade palladium, or see the live palladium spot price chart for yourself. Most analysts who follow the palladium market pay attention to its price relationship with platinum. Higher energy costs make mining an increasingly challenging business.

• Both FideliTrade and ScotiaMocatta maintain $1 billion in “all risk” insurance coverage at Lloyds of London for bullion held in its high-security vaults, and $300 million in contingent vault coverage.
• In fact, the company’s highly publicised merger with precious metals miner Lonmin in 2019 means that Sibanye-Stillwater now outpaces most miners in its palladium and platinum production.
• 74% of retail client accounts lose money when trading CFDs, with this investment provider.
• Ultimately, the cost of this storage and the low value-to-weight ratio could make holding physical palladium an impractical proposition.

NFS processes precious metal orders through FideliTrade or ScotiaMocatta, which are not affiliated with either FBS or NFS. On the supply side, the world’s largest palladium-producing country is South Africa. As mentioned before, some 85% of palladium usage goes to the auto industry.

How to Invest in Platinum

At expiration, the contracts are physically settled by delivery of palladium. The Chicago Mercantile Exchange offers a contract on palladium that settles into 100 troy ounces of the commodity. As the post-COVID auto rebound takes hold, the big-picture trends for palladium are gaining momentum. As long as auto demand is stable, palladium demand is likely to remain robust. The global push for cleaner emissions standards is driving palladium loadings ever higher on European and U.S. gasoline vehicles.

Although this makes for a fairly bullish outlook in palladium’s price in the medium term, tides may be turning. Longer term signs may be pointing to an ongoing acceleration in the popularity of EVs. This is because pressures are mounting internationally to reduce carbon footprints worldwide and one very high profile way to do this is encourage the production and purchase of EVs.

Consequently, this would act as an incentive to decrease the supply of palladium to the global market, thus increasing the price for the precious metal. Constraints around supply also affect price levels, because palladium is generally a secondary product to platinum and nickel, miners find it difficult to increase its extraction and output. A large percentage of palladium is mined in South Africa and increased costs of construction and fuel have affected palladium output levels in the past which therefore resulted in higher prices. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider.

Palladium is used in catalytic converters for automobiles, in fuel cells to generate power, in jewelry, dental fillings, and electronic components. Catalytic converters convert the toxic gases from automobiles into less harmful substances. The opposite way of investing in palladium is by purchasing physical bullion itself. With this comes the cost of having to store and transport the physical metal.

In Nature, Palladium only occurs in very small quantities and occasionally in its pure form together with platinum ore. The general political and economic state can always affect the different markets, however, the fact that only two countries are the main suppliers brings even more risks. A change that will affect one of them, especially Russia, can cause an upheaval in the palladium oanda forex broker review market. It is important to remember that often metals are linked to one another, so a dramatic change of palladium price might also result in other metals’ prices changing. As more ETFs feature precious metals, this could see the demand of palladium grow as the silver and gold markets become crowded. The proliferation of ETFs has exposed more investors to precious metals.

It is also beneficial to the dental industry as it is used to create inlays and dental bridges. Since the 1930s, palladium has been used in pieces of jewellery as an alternative to the precious metal, platinum. The opinions, estimates and projections (“information”) contained within this content are solely those of Sprott Asset Management LP (“SAM LP”) and are subject to change without notice. SAM LP makes every effort to ensure that the information has been derived from sources believed to be reliable and accurate.

How Much Palladium Is in a Catalytic Converter?

You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money. Fidelity offers additional ways to gain exposure to precious metals. For example, you can purchase mutual funds and exchange-traded funds that invest in the securities of companies involved in the production of gold and/or other precious metals. Although most mutual funds provide indirect exposure, they often provide greater diversity than direct investment in a single commodity. 79% of retail investor accounts lose money when trading CFDs with this provider.

A correction was forced by the rise of the coronavirus pandemic, but palladium could be the first metal to recover as supplies of the grey metal have lagged demand for nearly a decade. That could give traders another excellent opportunity in this most rare of precious metals. Open an account now to start spread betting and trading CFDs, and discover more of our platform features through our library of platform video guides. You can keep up to date with the palladium and precious metal industry news with our news and insights section, which contains fundamental analysis reports from Morningstar and news updates from Reuters. Palladium is very rare, but is more abundant than gold or platinum. The precious metal is also referred to as “cheap platinum” because both precious metals have similar chemical properties, although platinum is more expensive than palladium.

In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation forex reversal candlestick patterns or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it.

Exchange-traded funds that offer investors exposure to precious metals primarily focus on gold and silver. But a lesser-known option is palladium, a silvery metal used mostly in catalytic converters but that also has applications in jewelry, electronics, and dental fillings. Rather than investing in the commodity itself, with our Next Generation platform, you also have the option to spread bet or trade CFDs on a range of palladium stocks. Palladium stocks are the shares of companies that are involved in dealing with palladium, whether this be mining, refinement or production of other consumer goods using the precious metal. Palladium has become an increasingly popular commodity among investors. It is used in the production of many industrial and electronic products and is a much rarer material than other precious metals, such as gold.

The price of palladium hovered around $100 to $150 per ounce from 1986 to 1996 before spiking in 2001. Historically, the price of palladium was more volatile from 2001 to 2016 compared to previous periods. It then started to steadily rise and surpassed the $1,500 mark in February 2019. Along with platinum, rhodium, ruthenium, iridium, and osmium, the metal is part of a group known as platinum group metals.