Monday, February 2, 2009

What Is Palladium?

Palladium is a precious metal that is about 30 times as rare as gold. It is a natural white metal that has a luster similar to platinum, another precious metal.

Bullion Palladium pricePalladium is strong, durable and will last a long time without wear. It is tarnish resistant and resistant to intense heat.

Palladium is a member of the platinum group metals (PGM), a group which also includes platinum, osmium, rhodium, ruthenium, and iridium.

What is palladium used for?

Over half of the available supply of Palladium is used in the construction of catalytic converters, which convert auto exhaust into less dangerous substances. Palladium is also widely found in electrical goods such as computers, televisions, mobile phones, electrical contacts, multi-layer ceramic capacitors, and component plating.

Palladium Maple Leaf coinPalladium is also used in jewelry, starting in 1939 when its sister metal platinum was reserved for military use. One benefit of palladium for jewellers was that palladium was lighter than platinum so larger jewelry pieces could still be comfortable. And with palladium being a very malleable metal, stone setting was an easy process. But palladium jewelry was largely discontinued after World War II when platinum was permitted back in the jewelry trade. Its downsides as a jewelry metal were that palladium's color can become dull over time, and that it doesn't polish as well as platinum.

In addition to the above uses of palladium in commercial goods, it is also used in dentistry and medicine, groundwater treatment, and hydrogen purification. Palladium is also used in fuel cells, which combine hydrogen and oxygen to make electricity, water, and heat. These relatively recently discovered industrial uses caused palladium's value to skyrocket in recent years. The price, however, has fallen dramatically since last spring, due to the slowdown in the automotive industry, reducing demand for palladium used in catalytic converters.

Where is palladium found?

Locations of palladium mines are few, with the largest, most productive mines being in the Bushveld Igneous Complex in the South African Transvaal; the Stillwater complex in Montana, USA; Sudbury, Ontario, Canada, and the Norilisk Complex in Russia. Palladium is also recycled from scrapped catalytic converters.

Palladium historical prices over 5 year period.Similar to the current situation of silver, palladium's extensive use in industry coupled with its limited supply make palladium an intriguing investment opportunity. However, the continued instability in the auto industry and the possibile prominence of alternative energies in tomorrow's automobiles, the future of palladium is uncertain. So even though I own a number of rare palladium coins as part of my numismatic collection, I don't plan to buy any palladium bars or palladium coin bullion for the time being.

For more information on palladium, please visit the Buy Palladium blog.

No comments: