PALLADIUM REPORT 222021
INTRODUCTION TO PALLADIUM COMMODITIES.
Palladium, which belongs to the platinum group of metals (PGM), is a popular alternative commodity to platinum in the automotive industry and the jewelry industry.
Its largest use comes into play in the creation of pollution-reducing catalytic converters. Palladium’s malleability and resistance to corrosion make it the perfect metal for such use.
Because palladium is less expensive per troy ounce than platinum, it’s increasingly becoming the metal of choice in manufacturing these devices. Here are the main uses of palladium:
WHY TO BE CONSIDERATE LIKE INVERTION?
Although not as well known as other precious metals such as gold, silver and platinum, palladium offers strong potential investment opportunities.
Here are the most popular reasons that are driving more and more people to invest in palladium:
✔️ Wide industrial use
✔️ Protection against inflation
✔️ The growing demand of the automotive industry
✔️ Offer decrease
✔️ Rapid price growth
Of course, every investor can find more reasons to invest in palladium.
Another reason to be bullish on palladium is that the number of automobiles, trucks, and other vehicles equipped with platinum- and palladium-made catalytic converters is increasing, particularly in China. If you invest in palladium, keep an eye on automobilemanufacturing patterns.
Two countries essentially dominate the palladium market: Russia and South Africa. These two countries account for more than 85 percent of total palladium production.
Because these two countries dominate palladium production, any supply disruption from either country has a significant impact on palladium prices. Such was the case in early 2000, when the Russian government announced it would halt shipments of palladium and other platinum group metals for the year. As you can see, the price of palladium in the year 2000 almost doubled, partly in response to Russian supply-side disruptions.
The Russian government eventually announced a resumption of palladium-mining activity, and prices dropped back to normal levels in 2001. As a result of this price shock, mining companies have tried to diversify their activities beyond Russia and South Africa.
However, there’s no way around the fact that most of the world’s reserves of palladium ore are located in these two countries. As a matter of fact, perhaps no two countries dominate a commodity as much as Russia and South Africa dominate palladium.
NEED MORE REASON YOU MIGHT INVEST IN PALLADIUM?
✔️Bet on automobile demand
✔️Bet on supply constraints
✔️Bet on investment demand
✔️Bet on investment demand
IS PALLADIUM A SAFE BET BECAUSE OF THE AUTO INDUSTRY?
The automobile market is the most critical industry for palladium. Investing in the commodity is a way to bet on surging demand for automobiles in emerging market countries such china and india.
EVOLUTION OF PALLADIUM ON THE STOCK EXCHANGE
Palladium Futures The Chicago Mercantile Exchange (CME) offers a contract on palladium that settles into 100 troy ounces of the commodity.
The contracts trades globally on the CME Globex electronic trading platform and have a variety of expiration months.
Futures are a derivative instrument through which traders make leveraged bets on commodity prices. If prices decline, traders must deposit additional margin in order to maintain their positions. At expiration, the contracts are physically settled by delivery of palladium.
Options buyers pay a price known as a premium to purchase contracts. An options bet succeeds only if the price of palladium futures rises above the strike price by an amount greater than the premium paid for the contract. Therefore, options traders must be right about the size and timing of the move in palladium futures to profit from their trades.
In 2015, the price of palladium decreased by 29.1%, but in 2016 it increased by 22.6%, in 2017 it rose to 55%, and in 2018 it added another 18.3% to finally increase to 53.7% in 2019. Thus, during the last 5 years the price of palladium has increased by 145%.
➨ For the first time in history, the price of palladium on the stock market exceeded $ 2,000 an ounce on December 17, 2019.
➨ About a year earlier, the price of the precious metal was below $ 1,000.
➨ In February 2020, just before the coronavirus crisis, palladium reached almost $ 3,000.
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