Yesterday Palladium Broke Out – It is up around 10% in two days and it has plenty of room to move higher.
Yesterday Palladium Broke Out – It is up around 10% in two days and it has plenty of room to move higher.
MSN reported that “the U.S. has asked the Group of Seven allied countries to consider sanctions on exports of palladium and titanium from Russia, in an effort to put pressure on Russia’s economy in the wake of its invasion of Ukraine in February 2022.
“It may be difficult, however, to convince other nations to place sanctions on Russian palladium given its dominance as a global supplier, making up around 40% of global supply.” “It may be difficult, however, to convince other nations to place sanctions on Russian palladium given its dominance as a global supplier, making up around 40% of global supply.” “It may be difficult, however, to convince other nations to place sanctions on Russian palladium given its dominance as a global supplier, making up around 40% of global supply.”
Third Metal
In the world of hard assets, there is gold, and silver and then there is platinum and palladium.
A quick look at Wiki will tell you that palladium is an element with the symbol Pd and atomic number 46. It is a rare and lustrous silvery-white metal. Platinum, rhodium, ruthenium, iridium, and osmium are known as the platinum metals group (PGMs).
More than half of all palladium mined is used in catalytic converters which is why people steal them when prices get high. It is also used in electronics, dentistry, medicine, hydrogen fuel cells, and groundwater treatment.
Many investors believe that electric vehicles will take over and reduce the demand for platinum which is why it has sold off for the past three years.
That weakness is priced in. And it can turn fast. The last time the metal ran it jumped 1735% higher.
Palladium bull markets are incredible as there is a small global pool of liquidity.
The demand for palladium is strongly driven by harsh environmental rules and emerging technologies. If you’ve ever been to India you understand the need for catalytic converters.
Demand will continue and the price should go up along with other hard assets. But I like it because it is cheap and we have a potential catalyst in Russian sanctions.
Just look at this chart:
All of the buyers are out.
Keep in mind that this is a very small market. Gold is a $16 trillion market, silver is a $1.5 trillion market but palladium is just $0.3 trillion. Small dislocations in the market can cause huge swings. In many ways, it is like a penny stock.
I bought the abrdn Physical Palladium Shares ETF (PALL). You may also like Sibanye Stillwater Limited (SBSW). Sibanye is a $3.2 billion company and trades at 0.57 of sales. They also pay a 7.68% dividend.
The company lowered guidance last money due to the low cost of PMG metals. They also mine copper, silver, and gold. A turnaround in prices would benefit the company. A few years ago SBSW traded at $20, today they can be had for $4.95.
All the best,
Christian DeHaemer
Chief of Research
Outsider Club
