Investing in Precious Metals: Platinum vs Palladium
You’re likely fairly familiar with silver and gold since so much of our lives involves these two well-loved precious metals, but platinum and palladium are two other precious metals that you probably could use a brief lesson on. If you’re considering coin or bar investments in either of these, knowledge is key.
Both platinum and palladium actually have a lot in common. They are more durable and resistant to scratching than other precious metals, which can be especially great if you are thinking of having your wedding bands made from either. They also have very high melting points, which historically has meant that not much could be done with either until the early 1800s when a proper purification process was discovered. (Using very high temperatures.)
Often both of these precious metals are mined in association with other minerals such as copper and nickel in various locations around the world, which tend to be primarily in South Africa and Russia with some mining operations also in U.S.A. and Canada.
Now let’s break down the differences between the two.
What is Platinum?
Platinum is a chemical element that’s extremely durable and has a very high melting point. It’s almost twice as heavy as palladium and is slightly lighter in colour as well. (But the difference is often negligible.)
What is Platinum Used For?
A large quantity of platinum is used for catalytic converters, which help to lower emissions by converting pollutants into water, carbon dioxide and nitrogen. The other primary uses are for jewellery and investment purposes. A small amount is also needed for various chemical applications, glass production, oil refining and electrical devices.
How Has the Price of Platinum Performed in the Past?
To be honest, it hasn’t been a great year for platinum. The price has dropped from $1,200 USD per ounce to less than $1,000 USD as of this article’s writing. Looking back further, the price of platinum actually reached over $2,000 USD per ounce during the 2008 recession.
But of course, any wise investor holds their investment for longer than just a few months or even a few years. Before the 2008 recession, the price of platinum was consistently lower than $400 USD, so the long-term investment in platinum has actually been quite profitable for many of those who purchased and held.
Why Should you Invest in Platinum?
Often, this precious metal can’t be mined enough. There’s a small supply (far less than gold and silver) with few stockpiles. Its difficulty in this area is due to its few minable locations and urgent requirement in applications.
Invest in platinum if you feel that the long-term prospects for this rare precious metal are positive.
Can I Buy Platinum Today?
What is Palladium?
This equally rare precious metal is lighter than palladium, but also silvery-white like its platinum cousin.
What is Palladium Used For?
Similar to platinum, palladium is used in vehicles (catalytic converters), dental equipment and jewellery.
How Has the Price of Palladium Performed in the Past?
Twenty years ago, palladium could be purchased for approximately $300 USD per ounce. WIth minimal gains over the following 15 years, the price jumped to $2,800 USD by early 2020 and after some fluctuation largely based on its requirement for industrial applications, peaked at over $3,000 USD per ounce before settling around $2,000 USD. With the increasing global pressure on Russia and its economy (including palladium production) another rise in palladium could come at any time.
Why Should you Invest in Palladium?
Like platinum, there’s rarely a stockpile of this precious metal, and the demand is high. Stockpiles of gold and silver exist, but palladium is limited since it is so difficult to source in the world. Russia mines almost half of the palladium in the world, and with the recent Russian political and economic situation, production and distribution may be severely disrupted in the long term.
Twenty years ago you could buy palladium for as low as $200 USD per ounce. Today, the price has almost reached $3,000 and many investors believe that the future price potential is still much higher.
Of course, no investment has 100% surety, but if you believe that palladium will continue its rise, now is the time to buy palladium coins and bars.
Can I Buy Palladium Today?
Absolutely. Royal Bull has access to a wide range of precious metals. Contact us directly to learn what competitively priced palladium bars and coins we have access to right here in Canada.
Whether you’re interested in investing in physical platinum or physical palladium, trust Royal Bull with all of your Canadian precious metal investing needs. Browse our website and contact us if you have any questions.