Palladium Or Gold? What Is A More Valuable Investment?
You may have seen gold dominating the global investment market for a long time. But there’s a new metal in town, and its name is palladium.
In January this year, the price of palladium soared by more than 25% in just two weeks and in 2019, it doubled in value. This shimmering white material is increasing in usage after governments have tightened regulations to decrease vehicle pollution.
Does that mean you should be looking to invest in palladium or staying loyal to gold coins? Here’s what you need to know about which option is a more valuable investment for you in 2020.
Is It Useful?
If you’ve heard of this increasingly popular precious metal, you may know that palladium’s primary commercial use is in catalytic converters, mostly in gas-powered or hybrid vehicles.
You may also see palladium in dental fixtures for a cavity filling. On the other hand, gold coins may be a haven for you as it has maintained its value over time. Like palladium, gold doesn’t corrode and can be easily melted to make coins or preserved to pass down to your generations.
Is It Worth The Risk?
Since it converts toxic gases into cleaner car exhaust fumes, research has shown that automakers currently make up roughly 85% of palladium’s global consumption. If you think the demand for palladium will most likely increase for hybrid vehicles, you’re on the right track.
Does that mean you will find more palladium supply reserves? Not quite.
Forecasts suggest a supply deficit to come in palladium in the later years. In contrast, gold has retained its value even in times of geopolitical uncertainty. If you’re looking for a safe bet when world tensions rise, gold may be your calling.
Will Your Portfolio Diversify?
As an investor, you know precious metals tend to be volatile. Palladium is no exception. But since this metal is used in small quantities in the automotive industry and its demand is outperforming supply, you can expect a lot more price spikes. From its lows in 1996, palladium jumped nine-fold to its peak in 2001 as users expected Russian sales to slow.
In comparison, not only does gold act as a hedge against inflation and deflation, your portfolio can diversify by investing in gold. How? The price of your gold coins or bars will increase in response to events that cause the rate of paper investments like stocks and bonds to decline. Do more value and less risk sound like a better investment for you? We think so.
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