The Rare Earth Metal Palladium is an Attractive Investment
Copyright (c) 2012 Alison Withers
Used in jewellery for making white gold, in dentistry, in watch making, and in making surgical instruments by far the greatest use of the Rare Earth Metal Palladium is in the motor industry which consumes more than half of the world's supply.
The mineral is used in catalytic converters to convert up to 90% of harmful gases from auto exhaust into less-harmful substances and despite considerable research so far no substitute has been identified.
Palladium is a silvery white metal and is one of the platinum group and is only found in any significant quantities in Russia (Siberia) and South Africa, although there are smaller deposits in the USA and Canada. Russia was the top global producer in 2007, accounting for 44% of supplies, but more recently there have been signs that its supplies have been dwindling.
While some of this rare earth mineral is recovered from recycling catalytic convertors palladium's scarcity has made it of particular interest to investors and in May 2011 an article in the online nasdaq publication warned that Russia's strategic reserves were thought to be dwindling significantly to a point where there was only a three month supply left.
However, this cannot be verified because the information on reserves is a state secret.
As manufacturing has begun to recover from the 2008 global economic crisis gradually demand for palladium has been climbing, according to nasdaq pushing up prices in 2011 by 97% and with global vehicle production predicted to reach nearly 90 million by 2014 this makes palladium an even more attractive investment.
The consulting firm PricewaterhouseCoopers (PwC) further reinforced this prediction in February 2012, projecting that car production would be at a record high creating twice the yearly demand for palladium compared with a decade previously. This year's troubles involving South African miners are significant in this context because they could result in a reduction in the quantities of palladium being mined.
Logically, therefore, as demand from the vehicle manufacturers continues to rise, particularly in India and China, whose economies have continued to grow during the downturn, palladium is likely to remain of key interest to investors.
In just one day, according to a Reuters report in November 2012 the price of this rarest of rare earth metals rose by 4.6% to USD 633 per ounce. Credit Suisse analysts are reportedly predicting that the mineral could gain another 30% to reach USD 882 per ounce.
About the Author
Increasing demand for palladium by the motor industry among other users makes this rare earth metal an attractive investment. By Ali Withers. http://www.denver-trading.com/
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