The Shiniest of Them All is Palladium!

Shared From Dlike

I have continued my journey towards diversifying my exposure to non traditional asset classes that are not as subject to the manipulation and impacts of the traditional financial system as a way to have exposure elsewhere in case of another financial crisis.  While cryptocurrencies continue to be my favorite, I have also continued to add exposure to my precious metals as it really does not get any more tangible than the hard assets they can be to sustain value in a portfolio.  As I have continued my learnings of the sector, I have been keeping an eye on trends and prices which led me to this article.

From a price perspective, Palladium has now overtaken all precious metals as the most valuable per ounce and I have not understood why more specifically which has led me to become more interested in the fundamental drivers of value in the market.  As many markets, no matter being a commodify or not, prices are driven my the forces of supply and demand.  It seems that the short term structure of the Palladium market has provided great fundamentals for its continued increase in price.  Supply has been outpacing demand for a number of interesting reasons that could lead to further strength and trends in the overall market.

First, Palladium is used for the production of vehicles in addition to being used for electronics, dentistry and jewelry.  However, given some shifts in the vehicle market, Palladium has seen an increase in demand which has limited its supply for similar reasons.  It is one of the main metals used for pollution control in gas-based vehicles.  As China has increased its pollution regulation and other areas of the world have reduced their demand for Diesel engines due to the emission cheating scandals, Palladium has been the main raw material for the segment which has also been led by strong demand for vehicles.  

The interesting side is supply as most metals are almost immediately met by supply when price increases.  However, Palladium is a byproduct of Platinum which has not experienced the same demand due to the same issues noted.  Therefore, producers have been slowing production because of the decrease demand in Platinum which has led to a shortage of supply of Palladium.  This is a perfect scenario for increased prices as the lag between production and market are longer for a byproduct like Palladium.  While electric cars and alternative technologies will be a longer term challenge, it will take time for these aspects to balance the economics of the commodity.

Lastly, speculation has also fueled these gains as it has been heard that China is stockpiling the precious metals.  This has also led to a large increase of long positions in ETFs and funds that specialize in the metal as well.  In all, it seems like Palladium’s reign over the precious metals, including Gold, will last longer than usual.  Unlike Gold, Palladium is consumed more than it is stored which could lead to continued constraints in supply.  Investors are now only starting to look at how to gain exposure to it so it still may be an interesting opportunity at this te!

Discord: @newageinv#3174
Chat with me on Telegram: @NewAgeInv
Follow me on Twitter: @NAICrypto
The following are Affliate or Referral links to communities that I am a part of and use often. Signing up through them would reward me for my effort in attracting users to them:
If you are like me and interested in continued personal growth, invest in yourself and lets help each other out by leveraging the resources Minnowbooster provides by using my referral link
Start your collection of Steem Monsters today at my referral link
Try the Partiko Mobile app to engage while on the go with my referral link
Get started on the latest game on the blockchain Drug Wars by signing up here!
If you select one of my above referral links, I will sponsor a @steembasicincome SBI in return. Let me know if you do so in the comments below!

DISCLAIMER: The information discussed here is intended to enable the community to know my opinions and discuss them. It is not intended as and does not constitute investment advice or legal or tax advice or an offer to sell any asset to any person or a solicitation of any person of any offer to purchase any asset. The information here should not be construed as any endorsement, recommendation or sponsorship of any company or asset by me. There are inherent risks in relying on, using or retrieving any information found here, and I urge you to make sure you understand these risks before relying on, using or retrieving any information here. You should evaluate the information made available here, and you should seek the advice of professionals, as appropriate, to evaluate any opinion, advice, product, service or other information; I do not guarantee the suitability or potential value of any particular investment or information source. I may invest or otherwise hold an interest in these assets that may be discussed here.


Shared On DLIKE

Comments 8

Saludos @newageinv, excelente articulo sobre el paladio

En la actualidad, el mayor uso del paladio es en los sistemas de escape de vehículos, es decir en los convertidores catalíticos. La presión sobre los fabricantes de vehículos para disminuir la emisión de gases invernadero esta generando el incremento del uso de sistemas que permita el control de las emisiones.

En la actualidad el consumo a superado la oferta, haciendo esto presión sobre los precios a la alza, pero ya se conoce sobre estudios de otros sistemas que permitirán el control de las emisiones de los gases de la combustión, lo que generara en algún momento una liberación sobre la presión a la necesidad del mineral, afectando su precio.

Por ahora y en vista a la gran demanda del paladio seria interesante investigar la viabilidad sobre la recuperación del mineral de los sistemas de convertidores catalíticos usados que se retiran de los vehículos luego de su vida útil.

01.11.2019 02:17

A la medida que los precios se mantienen en alza, mas personas van a buscar alternativas como mencionas. Veremos que impacto podrían tener para los metales en general.

Posted using Partiko iOS

01.11.2019 03:04

Thank you so much for participating in the Partiko Delegation Plan Round 1! We really appreciate your support! As part of the delegation benefits, we just gave you a 3.00% upvote! Together, let’s change the world!

01.11.2019 02:30

All true. However, Palladium is not as generally accepted as a precious metal as Gold, Silver and Platinum. A lot of people don't even know what it is, how it looks and what its used for.
This means, its not as easy to sell again, or barter with during crisis times. And that is a important aspect of owning precious metals in general.
But of course Palladium can be used to speculate on higher prices, same as some other materials, like rare earths. The demand for those will certainly continue, as long as there is a modern civilisation.

01.11.2019 03:06

Great point I have not really considered! This is why I have tended to accumulate more Silver and Gold instead. However, Platinum and Palladium are beautiful!

Posted using Partiko iOS

05.11.2019 13:58

There is a mineral company that is building tokenized minerals on EOS, I wonder if they can get some tokenized palladium to enable the crypto community to have some exposure to palladium... they already have gold, sillica and Magnesium :/ With so many countries adopting electric cars and renewable energies the next few year Palladium might increase a lot in demand

01.11.2019 14:10

I have been watching the tokenization of precious metals for some time now and while a couple seem trustworthy, my concern remains with the liquidity factor given the immaturity of the market and asset class. I have it at the top of my list to look at and am interested in what a Maker DAI can really do with it.

Posted using Partiko iOS

05.11.2019 14:00

Hi @newageinv!

Your post was upvoted by @steem-ua, new Steem dApp, using UserAuthority for algorithmic post curation!
Your UA account score is currently 4.650 which ranks you at #1770 across all Steem accounts.
Your rank has not changed in the last three days.

In our last Algorithmic Curation Round, consisting of 94 contributions, your post is ranked at #29.

Evaluation of your UA score:
  • Some people are already following you, keep going!
  • The readers like your work!
  • Try to work on user engagement: the more people that interact with you via the comments, the higher your UA score!

Feel free to join our @steem-ua Discord server

02.11.2019 04:29