Palladium - how to invest in palladium? [Guide]

Palladium is a silvery element similar to platinum. It is extremely rare, mainly as a contamination of copper and zinc ores. It was only discovered in the XNUMXth century by William Hyde Wollaston in Great Britain.

Like other precious metals, it does not react with oxygen or with acids. What distinguishes palladium from other metals is its extraordinary ability to absorb hydrogen. Palladium is able to absorb hydrogen in a gaseous state in a ratio of 1: 850.

Chart - Palladium

The use of palladium

Palladium plays a significant role in the automotive industry. It is used in the production of car catalysts that reduce the emission of exhaust fumes and air pollution. In addition, it is used as a catalyst for chemical reactions and for the manufacture of jewelry.

Today, 75% of the palladium mined is used by the automotive industry.

Palladium mining and deposits in the world

What influences the price of palladium?

The situation in South Africa and Russia

South Africa and Russia together account for nearly 75% of the world's palladium supply. The largest producer of palladium in the world is the Russian company Nornickel. Sanctions on imports from Russia, employee strikes or legal changes regarding mines may affect the volatility in palladium prices.

The second largest producer of palladium, South Africa, is also characterized by political and economic instability. In the past, there have been power outages or fuel prices have risen drastically, affecting the continuity of palladium supplies.

The boom in the car industry

Due to the fact that more than ¾ of palladium is consumed by the automotive industry, the boom in this industry has a significant impact on the prices of palladium.

Gasoline-powered cars use palladium-based catalysts, while diesel ones use platinum-based catalysts. The growing market for cars in China, where most cars are gasoline, may increase the demand for palladium, and thus increase its price. Currently, China is responsible for consuming 30% of the world's mining of this metal.

In turn, the growing popularity of electric cars may adversely affect the prices of palladium.

Prices of alternative metals

Palladium can be replaced in the construction of catalysts by platinum and family Even in diesel engines, palladium can be used instead of platinum in a proportion of 25-50%.

How to invest in palladium

Location palladium

Same as gold or silver, we can buy palladium in the form of investment bars or coins. It is the most direct form of investment in this precious metal. However, in the case of palladium, we have to take into account very large commissions of sellers. It is an unpopular investment metal, and therefore investing in it is associated with much greater costs than investing in gold or silver, where the sellers' commissions are marginal.

Futures contracts

Na CME we will find futures contracts amounting to 100 oz of this precious metal. The contracts can be found under an abbreviated name PAU. Contracts are due in August, September, November, December, March and June.

ETF on palladium

Another way to invest in palladium is through buying ETF on palladium. It gives this option PALL Aberdeen Standard Physical Palladium Shares ETFwhich is available, among others at XTB broker (Symbol: PALL.US). The annual fees for investing in this ETF are 0.60% so they are quite low. Palladium is physically held in the form of bullion coins, held in London and Zurich.

The annual rate of return in this ETF is 48.17%, and in the 3-month perspective we could earn 14%.

Stocks of palladium mining companies

[AMS] Anglo American Platinum

The second largest producer of palladium in the world. The company owns not only mines, but also smelters and refineries. The company can boast of low production costs compared to the competition. Shares listed on the Johannesburg Stock Exchange, South Africa. The shares are traded on the South African Rand (currency symbol is ZAR).

[NILSY] Norilsk Nickel

Russian company founded in 1993. It is the world's largest producer of palladium and nickel. Listed on the stock exchanges in London, Frankfurt and Berlin. The company struggles with numerous environmental issues. It is known as the most polluting company in Russia. It is estimated that Norilsk emits nearly 2% of global sulfur dioxide emissions to the atmosphere annually. The company is taking steps to reduce emissions and invest in greener technologies.

Palladium CFDs

Palladium can also be traded with Forex brokers using CFDs. CFDs are leveraged, which means that we are investing a fraction of the capital needed to make a transaction. For palladium and European brokers, this will usually be the case 10%. Below is a list of brokers where you can start investing in palladium.

How to buy palladium - Brokers that offer palladium CFDs

Below is a list of offers from selected brokers offering the best conditions for trading on palladium (CFD).

Broker
End	Poland	Denmark
Palladium symbol	PALLADIUM	PALLADIUM
Min. Deposit	PLN 0 (recommended min. PLN 2000 or USD 500, EUR)	0 PLN / 0 EUR / 0 USD
Min. Lot value	price * 100 USD	b / d
Commission	-	-
Platform	xStation	SaxoTrader Pro Saxo Trader Go
	REVIEW	REVIEW
	CREATE AN ACCOUNT	CREATE AN ACCOUNT

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. From 72% to 89% of retail investor accounts record monetary losses as a result of trading CFDs. Think about whether you understand how CFDs work and whether you can afford the high risk of losing your money.