Could Palladium Become More Valuable Than Gold?


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For the first time in 16 years, the value of palladium is about to overtake the value of Gold.
The price of palladium has risen more the 30% in the last 6 months and progressively rising.
As of of today 9th October 2018 the current price of Palladium stands at €27,357.02 per kilogram, the highest ever it has risen too.

In addition to palladium's record-climb last Friday, the metal also managed to trade EU€218.10 above the EU€716.31 futures price of platinum and was within EU€107.48 of gold, which has struggled for the majority of 2018.
One of the main reasons behind the palladium price hike is the fact that supplies of the metal have tightened.

Since the majority of platinum group metals (PGMs) come from Russia, "potential of further economic sanctions is an overhanging threat to supply," said Peter Grant, vice president of commodities and futures brokerage Zaner Precious Metals.
"Seems logical that China would be bidding up the platinum group metals in an effort to secure needed supplies before any additional tariffs impinge on their ability to do so," he added.

Jones added to the supply shrinkage by pointing out that approximately 40 percent of palladium supply comes as a byproduct of platinum mining in South Africa, which has been declining on the back of escalating costs and low labor productivity.
He stated, "Regardless of the palladium price, since it is a byproduct metal, the supply is shrinking."

The reigning in of palladium supply coupled with automotive demand for the metal which is expected to rise to a record high of almost 8.6 million ounces before 2018 comes to a close, has market watchers comparing the precious metal to gold.
PMVC Fund: claims, “The gold/palladium ratio is historically the narrowest it has been in quite some time"

"Gold doesn't have the same everyday industrial usage as palladium," they added.
PMVC Fund also noted that the yellow metal is more susceptible to the greenback, which has weighed on its price heavily throughout this year.

Edward Egilinsky, the Managing Director of Direxion claims, "It is possible for palladium to trade higher than gold" if palladium supply continues to be muted, demand for autos and electronics increases, and tighter emission legislation further takes hold in China and the US," Egilinsky stated. "The chess pieces are all in place," he explained.


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