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Metal of future that can outshine gold and silver
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Metal of future that can outshine gold and silver
If you are asked to invest in precious metals, which metal will you pick? Gold? Silver? Perhaps. But the proverbial pot of gold is actually filled with palladium, a metal little known to investors and which can give dream returns.
Bloomberg data reveal that since January, palladium has outperformed gold by posting a 37 per cent return. Gold gave just 8 per cent.
You can’t invest in palladium in India though, because the metal is not traded on the country’s commodity exchanges. Nevertheless, portfolio advisors say the metal will eventually arrive in India as an investment option.
The New York Mercantile Exchange trades in palladium along with other precious metals such as gold, silver and platinum. Palladium is currently priced at $262.75 per ounce, way below gold, trading at $970.
In 2007, palladium prices peaked at about $1,300 – an indication of how high the metal can climb, given the right demand– supply equation.
Palladium is also listed on the London Stock Exchange, Euronext and Milan as an exchange-traded fund.
“In the past years we have seen palladium demand from jewellers and high net worth investors,” says Anmol Tilak, research head at Kotak Commodities. But mostly the demand has been from the automobile industry.
Recently, palladium jewellery was allowed the British hallmark. This could boost the demand of the metal. Sudish Nambiyat, senior research analyst at Man Financial Commodities, explains: “A hallmark is used by buyers as a guarantee of purity, thereby increasing the metal’s appeal.”
Naveen Mathur, commodity head at Angel Commodities, says the Indian interest in the metal is negligible since it is not traded here. “Once it gets listed in Indian exchanges the demand for the metal will kick in.”
But there has been some interest displayed by high net worth investors. “We have seen participation by Indians in many exchange traded funds in London and New York.”
Palladium is a white, corrosion-resistant metal playing a growing role in the European and Chinese jewellery industry, as it has come up as a cheaper option than gold and platinum, particularly so since their prices started climbing. Because it is also lighter, jewellery made of palladium weighs less for the same volume of gold.
Also because it is cheaper, its use in the manufacture of catalytic converters in the automobile industry is rising, according to Vikram Dhawan, vice- president at Reliance Capital.
Palladium easily replaces platinum in catalytic converters as it reacts to pollutants much the same way. In diesel engines, palladium is seen to be more effective than platinum.
“Beyond 2010, as the pollution norms get more stringent, demand for palladium will increase,” forecasts Dhawan.
Vijay Kumar, executive vice-president of Hindustan Motors, also sees demand rising as the economy recovers. “Auto vendors are likely to use it more because of its cheap price and inherent qualities.”
Platinum and palladium prices honour the supply- demand forces. Data suggest that in continued economic stability and growth, platinum prices tend to rise twice as fast as gold. In periods of economic uncertainty, platinum prices trail dwindling demand and fall below gold, which rises partly because money moves into the yellow metal.
Source:
http://www.mydigitalfc.com/news/metal-future-can-outshine-gold-and-silver-747
Bloomberg data reveal that since January, palladium has outperformed gold by posting a 37 per cent return. Gold gave just 8 per cent.
You can’t invest in palladium in India though, because the metal is not traded on the country’s commodity exchanges. Nevertheless, portfolio advisors say the metal will eventually arrive in India as an investment option.
The New York Mercantile Exchange trades in palladium along with other precious metals such as gold, silver and platinum. Palladium is currently priced at $262.75 per ounce, way below gold, trading at $970.
In 2007, palladium prices peaked at about $1,300 – an indication of how high the metal can climb, given the right demand– supply equation.
Palladium is also listed on the London Stock Exchange, Euronext and Milan as an exchange-traded fund.
“In the past years we have seen palladium demand from jewellers and high net worth investors,” says Anmol Tilak, research head at Kotak Commodities. But mostly the demand has been from the automobile industry.
Recently, palladium jewellery was allowed the British hallmark. This could boost the demand of the metal. Sudish Nambiyat, senior research analyst at Man Financial Commodities, explains: “A hallmark is used by buyers as a guarantee of purity, thereby increasing the metal’s appeal.”
Naveen Mathur, commodity head at Angel Commodities, says the Indian interest in the metal is negligible since it is not traded here. “Once it gets listed in Indian exchanges the demand for the metal will kick in.”
But there has been some interest displayed by high net worth investors. “We have seen participation by Indians in many exchange traded funds in London and New York.”
Palladium is a white, corrosion-resistant metal playing a growing role in the European and Chinese jewellery industry, as it has come up as a cheaper option than gold and platinum, particularly so since their prices started climbing. Because it is also lighter, jewellery made of palladium weighs less for the same volume of gold.
Also because it is cheaper, its use in the manufacture of catalytic converters in the automobile industry is rising, according to Vikram Dhawan, vice- president at Reliance Capital.
Palladium easily replaces platinum in catalytic converters as it reacts to pollutants much the same way. In diesel engines, palladium is seen to be more effective than platinum.
“Beyond 2010, as the pollution norms get more stringent, demand for palladium will increase,” forecasts Dhawan.
Vijay Kumar, executive vice-president of Hindustan Motors, also sees demand rising as the economy recovers. “Auto vendors are likely to use it more because of its cheap price and inherent qualities.”
Platinum and palladium prices honour the supply- demand forces. Data suggest that in continued economic stability and growth, platinum prices tend to rise twice as fast as gold. In periods of economic uncertainty, platinum prices trail dwindling demand and fall below gold, which rises partly because money moves into the yellow metal.
Source:
http://www.mydigitalfc.com/news/metal-future-can-outshine-gold-and-silver-747
