Platinum vs. Palladium: Which is the better Investment?

Platinum vs. Palladium: Which is the better Investment?

Last Updated on March 12, 2021 by Editor Futurescope

Investing in precious metals only continues to grow in popularity. Buying bars, coins, and rounds are an easy way to diversify a portfolio, hedge against inflation, and for some, add unique and collectible physical products to a basket of assets. 

Many look towards silver and gold when it comes time to purchase physical bullion, but others are expressing interest in how they can buy palladium or platinum. These two metals often maintain a high spot price but are much less noticed or discussed.  

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Platinum is a precious metal that has been used in a wide range of industries. Once seen as a nuisance by Spanish miners in the 1600s, today’s precious metal collectors understand the metal is rarer than gold. Today, platinum is often used in catalytic converters, metal machinery electrodes, and turbine engines.  

Palladium is often confused with platinum as it is categorized as a platinum group metal. Like platinum, palladium is also used in jewelry and industry. Palladium was discovered in the early 1800s and largely looks similar to platinum, with the exception that it is just a slightly darker white. It is not known how much palladium is on the earth, but miners understand there is a larger supply than for gold and platinum.  

Since the two metals share many similarities, are there advantages to investing in one over the other? Is platinum or palladium a better choice for those looking to add bullion to their portfolio? Keep reading to learn more. 

Breaking Down Platinum and Palladium Bullion

The rarity of a metal often correlates with its price. Bullion that is harder to find or has a smaller supply will usually maintain a higher value. As a result, palladium is a better choice for investors interested in adding a more exclusive metal to their portfolio. The global supply of platinum rests at about 1/10 of gold, but palladium still remains fifteen times rarer than platinum. The global platinum supply would only last for a year if mining halted.  

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Even though palladium is much rarer and more valuable than platinum, there was a time when platinum enjoyed a higher spot price than gold. However, investors who are interested in the most stable precious metal should buy platinum.  

The mining process for platinum is more stable than for palladium as operations go on across several nations to extract the white metal. In contrast, the vast majority of palladium mining comes from two countries, meaning price swings are more evident if instability or other complications in these nations impact mining. In March 2020, the price of palladium rose 15% in South Africa (a major hub for palladium mining) after the nation’s president temporarily shut down the mining sector. The price of platinum also jumped nearly 11%.  

The limited scope of palladium mining operations makes the metal more volatile from a price standpoint. While prices could rise if demand continues to do so, the spot ebbs and flows at a faster rate than platinum. Investors who are eager for a more stable bullion investment to hedge against inflation or protect a portfolio would be better off investing in platinum. 

Understanding The Better Choice Between Platinum and Palladium 

Investors who want to dip into precious metals will not go wrong with either palladium or platinum. Each of the white-colored metals maintains a strong value, is used in a range of important industries, and is rare in relation to other metals. Platinum and palladium coins, especially those minted by national governments, are in great demand and highly prized by collectors due to their allure and beauty. 

Overall, the better investment choice comes down to personal preference. Deciding on one metal or another will hinge on an investor’s personal financial goals and risk tolerance. Both metals can be bought fairly easily, as there are a number of coins, bars, and rounds made of platinum and palladium for consumers to purchase.  

People who are eager to weather greater volatility with the potential for higher prices should opt for palladium. Others who are more concerned about price stability and steady mining operations to keep up supply should choose platinum.

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