It is important to mention that both platinum and gold are precious metals, and they possess’ special unique qualities as well as exceptional rarity. Roughly, we can say that only 250 tons of platinum are produced annually, while gold can reach up to 2800 tons based on a year.
Gold production comes from numerous countries all across the globe, and you can consider it as a financial commodity those governments and individuals are using holding as the way of protecting their assets for future needs.
On the other hand, palladium is another element of incredible importance for the overall economy around us. Even though other precious metals overshadow it, we have mentioned above; you will be able to get a stable investment possibility with it.
It is cheaper than platinum, but the ratio is merging in the last few years since the popularity of palladium coins as the investment possibility. The idea is to examine both supply and demand so that you can understand the investment properties of palladium.
We have mentioned above the annual mining production of gold and platinum. However, when it comes to palladium, the yearly output reaches up to 1900 tons, and it comes primarily for Russia and South Africa.
At the same time, due to its recycling properties, you should add a more significant number the sum. To overall supply of palladium will rise for one percent in the next year and will continue to increase as time goes by.
When it comes to demand, you should have in mind that supply and demand correspond together and the number expected for this year is 1800 tons of palladium. It goes mostly to the automotive industry (more than 80%) as well as other sectors such as jewelry and industrial purposes.
You will be able to determine that shares are showing the unity of contribution and similarly to platinum, it is an industrial metal primarily, which means that the demand will remain stable and dominant, mainly since its use increased and became a necessity for the automotive industry.
When compared with platinum, the demand for this particular metal for jewelry reduced to a minimum and almost disappeared. Therefore, the investment could be detrimental if you decide to get inside this specific industry.
On the other hand, the demand for the automotive industry, as we have mentioned above, is much more significant, and this particular market is dependent on it. Check this link: https://en.wikipedia.org/wiki/Palladium to learn more on palladium.
Apart from that, the platinum is mostly used as a catalyst converter and only for diesel vehicles, while palladium is vital for gasoline cars.
That creates an idea that platinum is more critical for the European market, while palladium is a perfect choice for Asian and North American.
The global demand for palladium will increase for eight percent mainly due to the automotive industry. The expectations state that gasoline car numbers will increase which will also drive the need for palladium production.
What Will Happen With The Price?
Since the rise in supply increased in the last year when it comes to palladium and the demand increased as well for it due to its use in various industries, the market deficit will most likely occur.
That will create a possibility for palladium to increase shortly, and you should remember that stocks are plentiful and they can reach an even greater height in the future.
However, since the defect is happening, the question is how long these heights will last and what will happen, when the market tightens. As a result of the deficit, prices will rise, which will drive some investors to deplete their stocks and create a yo-yo effect.
The factor that could interfere with the overall price of palladium is the automotive industry and their shift to it from platinum.
Even though the price can reduce the competitiveness since platinum is much more efficient converter, the supply of platinum is still insufficient to handle the entire industry.
If the global GDP grows, and that is expected, the palladium price will rise as well, but in case that inflation increases and revelation get underway, the palladium will deteriorate, and that is a fact you should remember.
At the same time, the popularity of electric cars can create havoc for gasoline vehicle industry and therefore it is a constant threat for palladium price.