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Palladium

The Most Volatile Precious Metal

The performance of palladium in 2017 has been nothing short of phenomenal. Since we first alerted readers to the opportunity in palladium, the spot price of the metal (as measured by the PALL fund) has shot up by almost 50%, leaving gold and silver in the dust.

Palladium is part of the platinum group of metals. It is special because it, unlike most precious metals, is almost strictly for industrial use - specifically in the auto sector. Palladium is used to make catalytic converters, and this means the metal can benefit from both a strengthening automotive industry on top of all the other bullish factors for precious metals.



What is the Outlook for Palladium?


The palladium rally began with better than expected automobile data from China and the U.S at the start of the year. But as 2017 goes on, the automobile industry has begun to fade. In fact, ‘fade’ may be an understatement. Many manufacturers are cutting production, and Ford has slashed its profit estimates.

Clearly, something other than industrial demand is supporting palladium prices.  But does this mean the palladium rally is over? Not necessarily.

As long as precious metals continue to rally, the palladium investment market will remain strong. Palladium continues to outperform gold and silver, but investors should pay close attention to the worrying developments in the auto sector and not get complacent.