How to Choose Platinum or Palladium

The one positive of the recent economy’s downturn is that more and more people are finding out about the benefits of precious metals. Forced to confront the vulnerability of traditional investments they may have made, many people did their research and found precious metals as the answer they were looking for. Of course, learning about precious metals can mean a host of whole new questions. One common one revolves around which metals to invest in. While gold seems to be the agreed upon first choice, there are other metals that deserve consideration. Platinum or palladium, for example, are two precious metals with investment potential.

Precious Metals

Precious metals are metallic compounds that are both rare and naturally occurring. These factors, plus their utility, grant precious metals a high economic value. They have traditionally been valued for their luster, malleability and low reactivity. However, their conductivity, along with other attributes, has added to their value in recent years. The most popular precious metal is gold, followed by silver. Either platinum or palladium would make good investments too, though they’re relatively less known right now.

Platinum

Choosing platinum or palladium based on value leaves the former the easy winner. Platinum is the most valuable precious metal there is, typically being twice that of gold. In 2008, the extremely rare metal hit $2,250 per ounce and still averages $1,500 per ounce nowadays. The jewelry and automobile industries both demand plenty of platinum. Many even see it as the favorite to take over world currency if the dollar collapses, as opposed to gold.

 

The fact that this doesn’t make platinum a more popular investment than gold speaks a lot about the challenges platinum faces as an investment. The supply of platinum has always been a tumultuous endeavor. South Africa is by far the world’s biggest supplier of platinum and that region is plagued by all kinds of labor disputes that continuously hold up work. At the moment, Russia, the second biggest provider in the world, is attempting to increase its export, which could have huge positive effects on the metal’s value.

Palladium

If choosing platinum or palladium, the most affordable one is always going to be palladium. However, this rare metal’s price could soon be changing. The metal first became popular in the 1990s. This is when engineers realized palladium was the perfect metal for catalytic converters. As catalytic converters began becoming standard in all cars, palladium’s value shot up to $1,000 per commodities contract. But being used in automobiles would be just one of the many uses that were found for this precious metal, others including dentistry and electronics.

Since that time, palladium has managed to remain consistent and steady. When the economy got trounced in 2008, the metal saw no real fluctuation in price. Among other qualities, palladium is the least dense and has the lowest melting point of the platinum metals. This will surely lead to more uses for palladium in the future. That, coupled with its resistance to market forces since the 90s, makes it a very safe, yet still very attractive, investment.

In choosing whether to invest in platinum or palladium, the first consideration needs to always be cost. With platinum costing more, it may be the investment that needs to wait. Palladium is still a fine metal that has plenty of potential. The truth is it shouldn’t be a question of platinum or palladium though. An investor who can afford a good deal of platinum would still do well to invest in a good deal of palladium. Diversified portfolios are stronger portfolios. Besides, either platinum or palladium could be the metal discovered to have the properties needed for the next great invention.

How to Choose Platinum or Palladium
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