In addition to the well-known precious metals such as gold and silver, investors can also buy lesser-known metals such as palladium. Its price is mainly influenced by the stock exchange in Zurich.
What is palladium and what is it used for?
Palladium is a silvery-white precious metal whose properties are comparable to platinum in chemical and physical terms. It is used in nanotechnology as well as in dental prostheses. Today, palladium is also predominantly used to alloy gold into white gold, as nickel has proven unsuitable for many purposes due to its allergenic properties.
In automotive production, palladium is increasingly being used for catalytic converters instead of platinum, since this metal is less expensive to purchase and to process. Jewelry can also be made of palladium and looks beautiful, but so far it is much more widespread in East Asia than in Europe, where jewelry made of palladium can be bought only from a few specialized dealers.
How and where can investors buy palladium?
The typical form of investment in palladium is the purchase of bars. These, like gold or silver bars, are sold by banks and by precious metal dealers, and are also bought back at the request of the customer. Since the demand for palladium as a financial investment is lower than that for gold or silver, investors can currently only buy palladium bars from larger financial institutions or on order. Palladium coins offer another possibility for investment. So far, such coins have been issued by various countries such as France, Canada and several African countries.
The value of palladium coins depends mainly on the price of the precious metal, in addition, collector demand affects it. Instead of physical pieces, investors can also buy certificates and warrants on palladium. While the certificates as share certificates securitize a concrete ownership share in the precious metal, the acquisition of palladium options by private investors is a risky bet on the performance. Collectors can also buy jewelry made of palladium and, in addition to the increase in the value of the precious metal, profit from an increase in the price that future buyers are willing to pay for the processing.
What are the prospects for success when buying palladium?
When private customers buy palladium, they have to pay the full VAT rate, while gold bars and gold coins are still exempt from VAT. Since they are not allowed to charge VAT on a subsequent sale, the price of palladium must increase significantly in order to make a significant profit on the corresponding investment. In the long run, such an increase in value appears to be realistic. Since speculators tend to buy gold rather than palladium, its metal value is predominantly determined by actual demand.
- The price of palladium has shown occasional fluctuations in recent years, but overall it has risen appreciably within each year.
- Currently, demand for palladium from the auto industry is also expected to continue to rise.
- If jewelry fashions change and palladium jewelry is soon considered fashionable in Europe, significant jumps in the price of palladium can be expected.