Platinum and palladium – often overlooked but still on the rise

Platinum and palladium often receive little attention among precious metals as an investment. The focus of most private investors is still more on gold or silver. Platinum is the second most valuable precious metal after rhodium, which is even less known, and even before gold, which is so well known, and palladium offered the best performance of all precious metals in the last 10 years.

Platinum – rare and trendsetting

Platinum deposits are found in very few places in the world, and platinum is 30 times rarer than the much-loved gold. Due to its enormous stability at high temperatures, the rare precious metal is highly sought after in many industries.

In the automotive industry, platinum plays an extremely important role in the production of catalytic converters. Catalyst production alone accounts for around 33 percent of total demand. But platinum is also an important raw material in medical technology, laser technology and aerospace.

In the future, platinum will remain one of the most important precious metals, because it is also urgently needed in fuel and hydrogen technology and is thus future-oriented for all sustainable climate-neutral and climate-friendly technologies.

The main producing countries of the rare precious metal are South Africa, where about 77 percent of platinum production takes place, and Russia, which accounts for about 13 percent of global production.

But not only the industrial demand for platinum is enormous, also in the investment sector the demand increased rapidly in recent years. In the case of bars and coins alone, demand rose by a staggering 113 percent in 2020 compared with the previous year.

Palladium – with rising demand trend

Palladium is even less in the focus of interest of many investors than platinum. In the past 10 years, the precious metal offered the best overall performance of all precious metals.

In industry, palladium is mainly required in the automotive industry, medical and dental technology, but also in the electrical sector as well as in aviation and chemistry. The greatest demand, at around 33 percent of total demand, is in the automotive industry.

Similar to platinum, Russia and South Africa are the largest producers of palladium. Together with Canada, these three countries account for around 87 percent of global production. 

Experts expect demand for palladium to rise sharply in the future, especially in the automotive industry. It was only in May that the price of palladium per troy ounce rose above US$3,000 for the first time, as demand is already outstripping supply.

Palladium production is even expected to decline in 2021. Production interruptions and declines, such as the recent accident at one of the Russian mines, are still to be expected in the future, so that the precious metal can also be a worthwhile investment for investors in the long term.




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