Investors interested in ways to invest in palladium have a number of different options to consider. Here’s a rundown of three of them.
Palladium is a lesser-known option for precious metals investors compared to gold and silver. Recently, however, growing demand and a supply deficit have driven interest in ways to invest in palladium.
While palladium is used in jewelry, most of the metal is consumed by industrial markets — catalytic converters, which help remove the pollution from combustion engines, use more than 70 percent of global palladium production. Electronic and chemical applications are also key in the palladium industry.
On the supply side, the world’s largest palladium-producing country is South Africa. It has faced many mine disruptions in recent years, largely due to strikes and a lack of long-term investment in production facilities, but despite those risks miners are still moving forward with palladium development in the region.
Coming in a close second is Russia, which is the source of 40 percent of global mined palladium supply. Russia's ongoing war in Ukraine has placed it at the other end of the sanctions sword as the world's leaders try to force President Vladimir Putin to end the bloodshed. In April 2022, bourses in London and Chicago suspended two state-owned Russian refiners from their goods-delivery and sponge-accreditation lists.
In the face of healthy long-term demand and ongoing supply concerns, Metals Focus is forecasting that palladium prices will average US$2,290 per ounce in 2023.
With that in mind, here’s an overview of different ways that market participants can invest in palladium.
1. Ways to invest in palladium: ETFs
Palladium-backed exchange-traded funds (ETFs) track the precious metal like an index fund, but trade like stocks on an exchange. Examples of palladium ETFs include the Sprott Physical Platinum and Palladium Trust (ARCA:SPPP) and the Aberdeen Standard Physical Palladium Shares (ARCA:PALL).
The Sprott Physical Platinum and Palladium Trust ETF was created to invest and hold substantially all of its assets in physical palladium and platinum bullion. It currently holds nearly 47,000 ounces of palladium and over 61,000 ounces of platinum. The portfolio is held in custody at a federal crown corporation of the Canadian government.
For its part, the Aberdeen Standard Physical Palladium Shares is designed to track the performance of the palladium price, less expenses. It holds over 204,000 ounces of palladium in London at a secured vault belonging to JPMorgan Chase & Co. (NYSE:JPM).
2. Ways to invest in palladium: Bullion
Another way of investing in palladium is by holding physical assets directly, such as palladium bullion. In fact, financial investors may buy palladium bullion bars, palladium bullion coins or collectible palladium coins for portfolio growth. This approach may suit multiple kinds of investors, from those looking to invest small amounts of money in the metal to those with larger quantities of cash.
Palladium bars and wafers are another option, but these are not as readily available.
3. Ways to invest in palladium: Stocks
Finally, investors may gain exposure to palladium by investing in a palladium-focused business.
This method of palladium investing can be tricky — most of the world’s palladium is produced in countries with primary platinum mines, which means that it’s difficult to gain exposure purely to palladium.
The following TSXV- and TSX-listed companies are examples of smaller-scale stocks that offer investors exposure to palladium, in addition to platinum and other metals:
- Grid Metals (TSXV:GRDM,OTCQB:MSMGF), whose focus is the East Bull Lake palladium project in Ontario, Canada.
- Ivanhoe Mines (TSX:IVN,OTCQX:IVPAF), which is developing the Platreef project in South Africa with expected production commencing in 2024.
- New Age Metals (TSXV:NAM,OTCQB:NMTLF), a green metals company developing its River Valley platinum-group metals property in Ontario.
- Nickel Creek Platinum (TSX:NCP,OTCQB:NCPCF), which holds the Nickel Shäw polymetallic project in Canada’s Yukon.
- Stillwater Critical Minerals (TSXV:PGE,OTCQB:PGEZF), which is advancing its large-scale flagship Stillwater West platinum, palladium, nickel, copper, cobalt and gold project in Montana, US.
This is an updated version of an article first published by the Investing News Network in 2015.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Stillwater Critical Minerals is a client of the Investing News Network. This article is not paid-for content.
- War, Decarbonization Could Catalyze Platinum as Palladium Stays ... ›
- 5 Top Countries for Palladium and Platinum Production | INN ›
- Palladium Outlook 2022: Auto Demand to Determine Price ... ›
- What is the Best Precious Metal to Invest In? | INN ›