Trading in palladium: what you need to know
Palladium is the most expensive of the world’s ‘top four’ precious metals – namely gold, silver, platinum and palladium – an accolade earned due to its rarity and the difficulty in extracting it from the earth.
Although slightly less expensive per ounce than its rarer and lesser-known cousin rhodium, palladium is currently significantly more expensive than gold and is one of the most popular commodities to trade in. Russia and South Africa are the two largest palladium-producing countries in the world, and both are known for their rich mineral reserves.
Due to its incredibly limited use thanks to its high price, palladium has no dedicated miners focusing on it the way companies may focus on mining gold or silver. Instead, it’s mined as a secondary by product of digging for other metals.
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 is used in small amounts in many capacities, but its biggest consumer is car manufacturing, which uses palladium in catalytic converters, as well as in exhausts for hybrid electric vehicles. However, a significant disruptor for palladium’s popularity could be the rise of electric vehicles (EVs), which don’t require the precious metal.
