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Risks Associated with Investment in Palladium

An investor holding palladium coins

As investors continue to diversify their investment portfolios, they seek to invest in different types of precious metals, such as palladium. As with any kind of wealth-building activity, there are always going to be some risks involved.  However, when you research well, you can avoid tanking the value of your investment.

Read about the risk associated with palladium in this post so you can focus on maximizing your returns wisely.

Price Fluctuation

Demand Factors

Palladium is used in the auto sector to produce catalytic converters that help reduce emissions from cars. It is estimated that almost 75-85% of the total palladium supply is used in the industry. This means when the economy is depressed, and consumers are purchasing fewer cars, the demand for palladium will also decrease.

Another factor that palladium investors need to keep in mind is that platinum is a substitute for palladium. Auto manufacturers can switch to platinum when they find its price more favorable.

Similarly, the rise of electric vehicles can also have an impact on future demand for palladium. These vehicles don’t produce any emissions and hence don’t need any catalytic converters.  

Supply Factors

The lustrous white metal is mostly mined in Russia and South Africa, which means any supply chain disruptions can lead to price fluctuations. The Russian invasion led to sanctions that caused the prices of palladium to rise. Similarly, the discovery of more mines can lead to supply increasing and prices of the metal going down.

Counterfeit Risk

There are a lot of fraudulent websites online that are constantly trying to scam new investors. These websites sell counterfeit precious metals that end up wasting their money and ruin their experience with this new asset class. This is why it’s important to only buy gold bars or coins from a reliable metals exchange.

Search about the dealer online on sites such ConsumerAffairs and  Trust Pilot.  This will help you identify red flags and select ones that have a customer-centric attitude. Also, try to stick to renowned sovereign coins like Maple Leafs or Eagles.

An image of a palladium coin

Select a Reliable Precious Metal Exchange

Orion Metal Exchange is an experienced precious metals investment dealer that enjoys a 4.9 rating on sites such as ConsumerAffairs. We always prioritize our clients, which helps meet their expectations for high-quality silver, gold, platinum, palladium bullion, and coins.

We offer a complete one-window solution, which means we help with precious metal storage and help them set up their precious metals IRA accounts.

We don’t charge any storage fees for up to three years and offer our clients their preferred custodian and depository to store their metals.

Reach out to us now to learn about our services today. 

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