Live Metal Prices / oz
Gold:
1949.69 USD
Silver:
26.71 USD
Platinum:
931.50 USD
Palladium:
2382.50 USD
Rhodium:
14300.00 USD

Investing in Platinum and Palladium

Over the past couple of years, the decision to invest in precious metals has almost always been followed by the options gold and silver to the point that these two appear to be the only precious metals. With the advancement of time, however, several less common metals have been added to the list, including palladium and platinum. Although the hype for them is not as much as with the more popular precious metals, if investors are any good a source, there is no disputing that these metals constitute one of the few alternative ways of diversifying one's investment portfolios.

Presented with the options of investing in gold and silver, the question here is why invest in palladium and platinum, two less popular precious metals? Several reasons have been put forward to justify investing in the latter two metals, among which are:

Industrial use

Commonly referred to as white metals, it has been demonstrated that palladium and platinum have extensive industrial uses, including but not limited to serving as raw materials for jewelry and as vehicles' catalytic converters, in the fields of dentistry and electronics. Given the ever-advancing technology, especially in the automotive section, there is no questioning the fact that the demand for these white metals will be on the rise for yet a while. These extensive uses have increased the demand for them, making them safe-haven assets and a potential hedge against inflation.

Chemical similarities

Despite their differences, both metals have demonstrated several chemical similarities that give them near-complementary effects. For instance, as naturally-occurring members of the Platinum Group Metals family, both metals share similar catalytic properties, are resistant to chemical degradation, tarnish and wear, making them ideal for use as catalytic converters, serve as corrosion-resistant conductors for electrical equipment, fuel cells, used in dentistry for tooth repair and oxygen sensors, as well as for the manufacture of jewelry.

Rarity and cost

Despite being available in as many forms as gold and silver, platinum and palladium are available in significantly less quantities, making their prices more volatile and thus less appealing to casual investors. Reportedly rarer than gold, it is posited that the sum of all mined platinum will barely fill an average living room. In spite of this, however, palladium is believed to be approximately fifteen times as rare as platinum, yet cheaper, giving more reason for the scramble for it. As one of earth's rarest metals, the bulk (approximately 80%) of palladium has been reported to be controlled by Russia and South Africa, placing it in the category of rare metals and thus giving it higher-than-average volatility.

With the rising demand for white metals in the automotive, electrical and medical fields, investing in platinum and palladium has peaked in recent years, attracting serious long-term investors only, since casual investors tend to be scared off by the volatile prices.

In conclusion, in addition to adding to the diversification of your portfolio, research has shown that investing in platinum and palladium is a wise choice since both metals have been demonstrated to maintain their economic values over time, and unlike the more common metals, gold, and silver, these white metals stand no risk of being confiscated as was the case during the nationalization of gold. Unlike gold which is often affected my market fluctuation, thus far, the white metals have presented an admirable resistance to slides in the precious metals market likely as a result of their higher industrial value.