Palladium as an investment
Encyclopedia
Like other precious metal
s, palladium
may be used as an investment. Palladium price peaked near US$1,100 per troy ounce
in January 2001 (approximately US$1340 in 2009 dollars) driven mainly on speculation of the catalytic converter
demand from the automobile industry. Palladium is traded in the spot market
with the code "XPD". When settled in USD, the code is "XPDUSD".
Recent years' palladium surplus condition was caused by the Russian government selling off government stockpiles built up during the Soviet Era, at a pace of about 1.6 to 2 million ounces a year. The amount and status of this stockpile is kept as a state secret
.
. It is listed on the London Stock Exchange
as PHPD, Xetra Trading System
, Euronext
and Milan
. ETFS Physical Palladium Shares is an ETF traded on the New York Stock Exchange
.
s include the Canadian Maple Leaf
and the Chinese Panda
. The liquidity of direct palladium bullion investment is not as good as gold
and silver
due to low circulation of palladium coins and wider spread
between buying and selling price.
Precious metal
A precious metal is a rare, naturally occurring metallic chemical element of high economic value.Chemically, the precious metals are less reactive than most elements, have high lustre, are softer or more ductile, and have higher melting points than other metals...
s, palladium
Palladium
Palladium is a chemical element with the chemical symbol Pd and an atomic number of 46. It is a rare and lustrous silvery-white metal discovered in 1803 by William Hyde Wollaston. He named it after the asteroid Pallas, which was itself named after the epithet of the Greek goddess Athena, acquired...
may be used as an investment. Palladium price peaked near US$1,100 per troy ounce
Troy ounce
The troy ounce is a unit of imperial measure. In the present day it is most commonly used to gauge the weight of precious metals. One troy ounce is nowadays defined as exactly 0.0311034768 kg = 31.1034768 g. There are approximately 32.1507466 troy oz in 1 kg...
in January 2001 (approximately US$1340 in 2009 dollars) driven mainly on speculation of the catalytic converter
Catalytic converter
A catalytic converter is a device used to convert toxic exhaust emissions from an internal combustion engine into non-toxic substances. Inside a catalytic converter, a catalyst stimulates a chemical reaction in which noxious byproducts of combustion are converted to less toxic substances by dint...
demand from the automobile industry. Palladium is traded in the spot market
Spot market
The spot market or cash market is a public financial market, in which financial instruments or commodities are traded for immediate delivery. It contrasts with a futures market in which delivery is due at a later date...
with the code "XPD". When settled in USD, the code is "XPDUSD".
Recent years' palladium surplus condition was caused by the Russian government selling off government stockpiles built up during the Soviet Era, at a pace of about 1.6 to 2 million ounces a year. The amount and status of this stockpile is kept as a state secret
State Secret
State Secret is a 1950 British drama film directed by Sidney Gilliat and starring Douglas Fairbanks Jr., Jack Hawkins, Glynis Johns and Herbert Lom. It was released in the United States under the title The Great Manhunt.-Cast:...
.
Exchange-traded products
ETFS Physical Palladium is backed by allocated palladium bullion and was the world's first palladium ETFExchange-traded fund
An exchange-traded fund is an investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day. Most ETFs track an index, such as the S&P 500 or MSCI EAFE...
. It is listed on the London Stock Exchange
London Stock Exchange
The London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...
as PHPD, Xetra Trading System
Xetra (trading system)
Xetra is a worldwide electronic securities trading system based in Frankfurt, Germany. It was created for the Frankfurt Stock Exchange and launched in November, 1997. It is operated by Deutsche Börse....
, Euronext
Euronext
Euronext N.V. is a pan-European stock exchange based in Amsterdam and with subsidiaries in Belgium, France, Netherlands, Portugal and the United Kingdom. In addition to equities and derivatives markets, the Euronext group provides clearing and information services...
and Milan
Borsa Italiana
The Borsa Italiana S.p.A., based in Milan, is Italy's main stock exchange. It was privatised in 1997 and is a part of the London Stock Exchange Group plc since 2007. In 2005, the companies listed on the Borsa were worth US$890 billion...
. ETFS Physical Palladium Shares is an ETF traded on the New York Stock Exchange
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
.
Bullion coins and bars
A traditional way of investing in palladium is buying bullion coins and bars made of palladium. Available palladium coinPalladium coin
Palladium coins are a form of coinage made out of the rare silver-white transition metal palladium. Palladium is internationally recognised as a form of currency under ISO 4217. Sierra Leone issued the first palladium coins in 1966. Tonga commenced issuing palladium coins a year later in 1967,...
s include the Canadian Maple Leaf
Canadian Maple Leaf
The Canadian Maple Leaf coins are bullion coins of gold, silver, platinum, or palladium. The coins are issued by the Royal Canadian Mint.-List of coins:*Canadian Gold Maple Leaf*Canadian Platinum Maple Leaf*Canadian Silver Maple Leaf...
and the Chinese Panda
Chinese Panda coins
Chinese Panda coins are bullion coins produced by the People's Republic of China.* Chinese Silver Panda* Chinese Gold Panda* Chinese Palladium Panda...
. The liquidity of direct palladium bullion investment is not as good as gold
Gold
Gold is a chemical element with the symbol Au and an atomic number of 79. Gold is a dense, soft, shiny, malleable and ductile metal. Pure gold has a bright yellow color and luster traditionally considered attractive, which it maintains without oxidizing in air or water. Chemically, gold is a...
and silver
Silver
Silver is a metallic chemical element with the chemical symbol Ag and atomic number 47. A soft, white, lustrous transition metal, it has the highest electrical conductivity of any element and the highest thermal conductivity of any metal...
due to low circulation of palladium coins and wider spread
Bid-offer spread
The bid–offer spread for securities is the difference between the prices quoted for an immediate sale and an immediate purchase...
between buying and selling price.
See also
- Diamonds as an investmentDiamonds as an investment-History:Diamonds have been treasured as gemstones since the ancient times. Popularity of diamonds has risen since the 19th century because of successful advertising in spite of a greatly increased supply. Diamonds are not normally used as a mainline store of value during times of crisis, because...
- Gold as an investmentGold as an investmentOf all the precious metals, gold is the most popular as an investment. Investors generally buy gold as a hedge or harbor against economic, political, or social fiat currency crises...
- Platinum as an investmentPlatinum as an investmentPlatinum has a much shorter history in the financial sector than either gold or silver, which were known to ancient civilizations.Platinum is relatively scarce even among the precious metals. New mine production totals approximately only 5 million troy ounces a year...
- Silver as an investmentSilver as an investmentSilver, like other precious metals, may be used as an investment. For more than four thousand years, silver has been regarded as a form of money and store of value. However, since the end of the silver standard, silver has lost its role as legal tender in many developed countries such as the...