Why Is the Price of Palladium Skyrocketing?

Why is the price of palladium skyrocketing?
Nov 4, 2019

The price of palladium has continued to rise over the course of 2019, breaking multiple records and even surpassed the price of gold in October. Looking closely at the supply and demand for this precious metal could indicate the palladium rally is only just beginning. Learn more in this episode of USMR Market Insights with Patrick Brunson.

Why Is the Price of Palladium Skyrocketing? – Video Transcription

Patrick Brunson:               00:00

If you've been watching the precious metals market lately, you probably noticed that one precious metal, in particular, has been breaking records. That metal is palladium. At the time of this recording, Palladium's prices just went above a record price of $1,800 per ounce. In fact, it's been hitting new record prices consistently over the past several months. So why has there been such a spike in palladium prices? Well, there's a couple of reasons, but it all leads back to the basics of supply and demand.

Patrick Brunson:               00:29

Palladium is in high demand primarily because it's used in devices called catalytic converters. These devices scrub toxic pollution from vehicle emissions. As countries pass more environmental protection laws over time, demand could continue to be pushed upwards. Recently, China has been regulating vehicle pollution more heavily and has passed laws that require more palladium to be used by auto manufacturers. In Europe, gasoline-powered cars that use palladium devices have gone up in demand as well. This is due to revelations that several diesel car companies, which use non-palladium based devices, cheated on their emissions tests. As a result, gasoline-powered cars that have to use palladium have become more popular.

Patrick Brunson:               01:14

Aside from its use in catalytic converters, Palladium has a few other applications. Notably, it's utilized in jewelry, electronics, as well as dentistry. Despite an increase in need for the silvery-white metal, the supply of palladium is not increasing. There's actually a massive shortage worldwide. One of the reasons is that it's only mined as a by-product of different metals such as nickel or platinum. This naturally limits the output of palladium from several mines. Mines, where palladium is extracted, are located in South Africa and Russia and the mines in South Africa, they've been encountering issues and shrink considerably in August. If you look at Russia, they're having a major slow down in production as well. Palladium's price is heavily influenced by its supply and demand, just like many other precious metals. However, we've seen a much larger amount of demand for palladium than we've seen at any other point in history.

Patrick Brunson:               02:12

So to get more information about the supply of precious metals like palladium, call the number on your screen and get U.S. Money Reserve's latest Precious Metals Report, the 2019 edition. This report answers many questions you may have about precious metals and how you can diversify your portfolio along with it. So please click the link below or call the number on your screen right now to get your copy and give us your thoughts and share this video. If you're watching us from YouTube, please subscribe to our channel so that you don't miss a single episode. I'm U.S. Money Reserves, Patrick Brunson, and thank you for watching Market Insights.


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