The Shiniest Metal of Them All

If you like precious metals, you probably like gold and silver. Let me tell you about a shiny metal that is leaving both gold and silver in the dust.

That metal is palladium – and it’s up 42.6% since the start of the year. And up 73% since the start of the new bull market in metals at the beginning of 2016. That runs rings around gold’s performance. The yellow metal is up “only” 12.5% this year and 20.5% since the start of the new bull market.

So, yeah. Palladium is the hot ticket among the shinier, non-energy metals.

Side note: I’ve told you about the energy metals before. They’re in a supercycle, and looking good. That’s part of the big megatrend of the world’s move to electric cars.

But the sun doesn’t rise and set on electric cars. So, let’s get back to the shiny stuff. The metals that can protect you from central bank money-printing.

Here is a chart of these metals, as tracked by the ETFs that hold the physical metal, since the start of the new bull market.

Wow! Just look at palladium. Why is it so hot? And why is platinum – which is much rarer than the other metals shown here – doing so poorly?

Demand Shifts into High Gear

The reason is that both palladium and platinum are also industrial metals. And even there, the metals’ fortunes are zooming in different directions.

Palladium is used in catalytic converters for gasoline engines. And global car sales are shifting into high gear. World vehicle sales jumped 4.1% in August. In China, the world’s biggest car market, sales are up a whopping 8% year-over-year. Zoom-zoom!

That is revving up demand for palladium.

But what about platinum? Well, platinum is mainly used for pollution controls in diesel engines. Volkswagen is the world’s biggest car maker. Remember how its diesel cars were supposed to be so clean?

Maybe not so much. Volkswagen was caught red-handed cheating on its diesel emissions tests. The company is now liable for billions of dollars in fines.

But it’s not just Volkswagen. According to a recent study, EVERY diesel car company is emitting more pollution than tests show.

This is hurting the popularity of diesel-powered vehicles. Especially in Europe. Europe’s diesel-engine market share may fall by half by 2025. And that will remove 300,000 to 600,000 ounces of platinum demand in the next decade, according to Citigroup.

Meanwhile, the supply/demand picture in palladium is very tight. Citigroup says mine supply of palladium could fall short of demand by more than a million ounces next year.

Just recently, palladium climbed above $1,000 an ounce for the first time since 2001. Its increase is fueled by hopes for rising demand from the car industry amid a shortage of supply.

What’s more, palladium became more expensive than platinum last month for the first time in 16 years.

A Smart Way to Play Palladium

Don’t buy now. Wait for a pullback. That’s what I’m going to do, and I think you should too.

After hitting a 16-year high on Monday, palladium has already started dropping hard, and it could take a while longer before it hits bottom.

But when that time comes, probably very soon, there’s going to be a tremendous buying opportunity. And it’s just one of many!

In fact, that’s precisely the kind of buying opportunity we talked about in the first session of our Supercycle Investing Summit, which we just completed 90 minutes ago. If you missed it or want to see it again, just click here for the recording.

All the best,

Sean Brodrick

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Comments 5

  1. William Peavey October 18, 2017

    The U.S. Mint has just minted its first Palladium coin this summer. The obverse (face) shows Liberty with the winged hat which graced the so called silver mercury dime years ago. The reverse has a very elegant eagle. Called the Palladium Eagle it is one ounce coin in high relief.
    https://www.moderncoinmart.com/2017-1-oz-high-relief-palladium-american-eagle-25-coin-ngc-ms70-fdi-black-core-holder-exclusive-us-mint-225th-anniversary-label.html

    Reply

    • Sean Brodrick October 23, 2017

      Thanks for the update and link, William.

      Reply

  2. Frank Taylor October 19, 2017

    I’m not going to buy either platinum or palladium. The megatrend by auto makers to vastly increase their sales of electric vehicles to solve the pollution problem will unquestionably reduce demand for both of these metals!

    Reply

  3. James October 19, 2017

    Maybe there will be a gold tranche? A return to the gold bullion standard? Maybe even a gold rush or a gold avalanche. Leveraged etfs are what to buy.

    Reply

  4. brian October 21, 2017

    ALL I CAN SAY IS ; RHODIUM …RHODIUMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMM !!!!!!!

    Reply