Palladium Has Outshone Gold and Silver
Source: Resource Investing News, Vincenzo Desroches (11/2/10)
"The "other white metal," has quietly dominated in price performance."
Price's for palladium are reaching their highs for the decade. The following price history chart is worthy of discussion:
Ford Motor Company, fearing a shortage brought on by ongoing political instability, stockpiled the metal at market-panicked prices, as noted by the severe spike in 2000. When tensions subsided, Ford recorded a financial loss of over $1 billion after prices plummeted back to reality. The recent recession and the related drop in global manufacturing caused the dip in prices in 2008.
As environmental concerns continue to dictate stiffer emission controls for autos and trucks, palladium prices will rise to meet growing manufacturing demands.
With both old and new technology contributing to demand for palladium, a growing concern for industrial users is the obvious investment potential of the metal for global investors. Mutual funds, ETFs and bullion safekeeping firms are avenues for retail investors to benefit from the metal's recent price run up, but the "hoarding effect" may drive the price even higher. A weakening Dollar in the forex market may also cause appreciation and speculation based on forex news alone.
Speculation will always follow situations such as these. However, the global recovery of the manufacturing sector will benefit palladium prices in the long run.