The Refiner’s Fire: Ancient Wisdom for Modern Wealth
And he shall sit as a refiner and purifier of silver…” – Malachi 3:3 (KJV) “…if I will not open
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Simply put, platinum and palladium are two additional bullion options in the world of precious metals. While they are two lesser-known options, partly because they have not been around for thousands of years and have not been used as currency, they are worth considering for their rarity and growing uses in the industrial and luxury industries.
Like gold, platinum and palladium are highly valued and store great wealth in a small amount of metal. Thanks to their use in the electronics and automotive industries and because they are rarer than gold, platinum, and palladium have become desirable commodities for savvy investors. However, it’s important to note that platinum and palladium are more volatile in price than gold and silver. Investors should always exercise caution when investing in them.
Both metals play a significant role in industrial applications in the automotive and industrial sectors. As their global demand increases, so does their value as commodities.
Because platinum and palladium are rarer than gold and silver, they are another attractive store of precious metal bullion value. Limited supplies continue to lead to price appreciation over time.
Platinum and palladium can play an effective role in diversifying one’s holdings of precious metals.
Understanding the terms spot and premium is essential to platinum and palladium investing. The spot price is the price at which platinum and palladium trades, and the premium is the trade fee or cost over spot prices. Tracking spot prices and obtaining platinum and palladium with the lowest premium ensures the best investment practices for precious metals.
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Both platinum and palladium are available in bars, rounds, and coins. However, very few government-minted coins are available in either metal compared to gold or silver options and are harder to find.
Other platinum bullion items, such as the Isle of Man Platinum Noble and Engelhard’s Platinum Prospector, are sometimes, but not often, available in the secondary market.
Investing in platinum or palladium bars is a convenient way to invest in these valuable and scarce metals. Just like their more commonly known counterparts—gold and silver—platinum and palladium bars are manufactured by various respected refineries. Notable names in the industry include PAMP, Credit Suisse, and Valcambi, which are renowned for their quality and reliability. These refineries produce these precious metal bars in a variety of sizes, the 1-ounce bar being particularly favored when it comes to palladium. This preference may be due to its balance of portability, affordability, and liquidity in the market.
Whether investing in small increments or as part of a broader investment strategy, platinum or palladium bars can play a role in providing further diversification in a well-balanced precious metals portfolio for wealth preservation.
Platinum: Despite numerous government mints producing palladium coins in recent years, palladium has not a history of being used as money. The mints produced palladium coins solely to take advantage of the excitement surrounding palladium, which was heralded as an alternative to platinum for many industrial uses.
Palladium: Popular palladium forms are 1-oz bars, with PAMP being the most active refinery. In late 2005, the Royal Canadian Mint began striking 1-oz Palladium Maple Leaf coins, usually available today. Although PAMP is a respected name in precious metals refining, many investors prefer coins produced by government mints. However, PAMP bullion bars carry smaller premiums than Maple Leafs.
Discovered in 1557, Platinum, with the symbol PT and atomic number 78, is in period 6, group 10 on the periodic table, and is considered one of the rarer noble metals. It has a glittering silvery-white appearance similar to silver. Platinum is known for its dense, malleable, ductile, and unreactive properties. It is outstandingly resistant to oxidation, has a high melting point, and is resistant to corrosion and chemical decay. The primary use of platinum is in catalytic converters. The jewelry industry also consumes considerable quantities of platinum.
Platinum, gold, silver, and palladium are excellent conductors of heat and electricity (Silver is being the best.), Because of platinum’s highly malleable properties, it can be made in solid sheets thin enough for light to pass through. Because of these characteristics, platinum can even be found as thin sheets of wallpaper adorning the walls of some of the elaborate Gilded Aged mansions of wealthy tycoons. Also, noble metals like platinum are so ductile they can be drawn into wires thinner than a hair. Noble metals like platinum are essential in manufacturing many high-tech products, making them valuable commodities.
The majority of platinum supplies come from South Africa and Russia. Both of these areas face significant challenges related to mining and geopolitical risks that can limit supply and boost prices.
Discovered in 1803, Palladium, with the symbol PD and atomic number 46, is located in group 10, period 5 on the periodic table and is considered a transition and noble metal. Palladium is one of six metals that form a group of elements called the platinum group metals (PGM). Its oxidation resistance is one reason it is becoming popular as jewelry and is a component in white gold. Still, the primary use for palladium is in autocatalytic converters, where it reacts similarly to platinum in combating pollutants because it can absorb large quantities of hydrogen gas.
From time to time, some major automakers and their catalytic converter manufacturers announce that they are switching from platinum to palladium, or vice versa, to manufacture converters. This causes the metal being dropped to fall in price and the metal doing the replacing to rise in price.
Additionally, frequent production and supply problems in South Africa and Russia, the two major sources of palladium and platinum, cause big price swings.
CMIGS only rarely makes recommendations on palladium or platinum because it is difficult–if not impossible–to anticipate the next bombshell to be dropped on the market. However, from time to time, precious metals analytical firms present bullion scenarios for palladium (and platinum).
About 80% of palladium is mined in Russia and South Africa. Similar to platinum, the limited geographic supply can increase potential price increases.
Both metals can experience significant price swings due to their reliance on industrial demand, which can fluctuate based on economic cycles.
There’s always a risk of substitution. For example, if automakers switch from palladium to platinum due to cost, it could impact palladium prices.
And he shall sit as a refiner and purifier of silver…” – Malachi 3:3 (KJV) “…if I will not open
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