Palladium as an investment

1 XPD = $ 693.5 1000 USD = 1.442 XPD 1 XPD = 505.36 EUR 1000 EUR = 1.9788 XPD 1 XPD = 616.64 CHF 1000 CHF = 1.6217 XPD

The palladium price arises from the interplay of fundamental market data such as supply of and demand for palladium; Moreover, it is influenced by emotions (eg, fear of inflation ), events, long-term developments, speculation and long-term expectations.

• 2.1 Market mechanisms
• 2.2 Exchanges
• 2.3 Palladium Fixing
• 2.4 Palladium system

History

19th century

Palladium was discovered in 1803 by William Hyde Wollaston. He named it in 1804 after two years earlier discovered asteroid Pallas. Wollaston found element 46 in the south american platinum ore due to low yields of platinum from dissolved in aqua regia samples.

The first isolated from the crude platinum of the river Chocó in the north- western Colombia palladium has a price since its discovery. In April 1803 printed anonymous note was put into circulation, as its author later William Hyde Wollaston, secretary of the Royal Society has been determined, in London. On the paper the discovery of palladium was announced as the fourth precious metal, and the readers pointed out that it per Gran to one shilling in samples of five shillings, half a pound and 1 pound sterling in the mineral dealers Jacob Forster, no. 26 Gerrard Street, Soho, London, was bought. The palladium stepped so with a price of 480 shillings per troy ounce ( 15.8 grams gold marks each ), ie for the five and a half times the price of gold in the world.

As a silver-white, non- tarnishing and much higher melting point than gold and silver precious metal it was suitable from the beginning for making jewelery. It was able to increase its price yet, as it (usually 0.1 to 0.7 percent) occurred in crude platinum Colombia and Russia, but also in the natural osmiridium only in very small amounts, which were in some cases far below the amounts of the other platinum metals. By 1890, Palladium was one of the most expensive platinum metals. Between 1860 and 1865 Palladium with 56.1 Goldmark, 1866-1870 with 50.50, from 1871 to 1875 with 32,80 and 1886-1890 is rated 39.0 Goldmark per gram. So it was decades 20 times as expensive as gold. From 1893 to 1913, then the price had equalized with 3-4 gold marks per gram of the now higher prices for platinum, iridium and osmiridium.

In the period 1889-1899 compared to the platinum content of the significant palladium content of the nickel - pyrrhotite deposits in the Sudbury Basin in Canada was known. The anode slimes and residues of these ores were since 1899 at least as much palladium as platinum. So it was with the increasing promotion of this world's most important Nickelerzgruben only a matter of time that the palladium price match the price of platinum or would fall below it.

20th century

During the First World War, the precious metal has been used as a substitute for a considerable extent used for ammunition purposes platinum, and though, as it was more expensive than platinum alloyed with about 80 percent gold. Beginning of 1917 was the palladium price is approximately the same as that of platinum. As this metal but more and more difficult was procured, the palladium price in mid-July rose to $ 115 in September to 125 U.S. dollars per troy ounce ( 15.70 and 17.10 dollars per gram). End of 1917, cost of palladium at high demand 130 to 135 U.S. dollars ( 17.77 to 18.45 dollars per gram).

1919 was below the palladium price finally the platinum price after from the Sudbury ores around 1300 kg of palladium were promoted. 1923 Palladium then only half as expensive as platinum. 1923 and 1924 met in South Africa, the geologists Adolph Erasmus and Hans Merensky in rich quartz veins of the Waterberg, in the dunite - tube ( dunite pipe ) Onverwacht in Rustenburg and in the sulfide ores of the Merensky Reef on a palladium guide which almost corresponded to that of platinum. Then the price of palladium dropped to 1937 the annual average to half the platinum price. When the degradation hopes of the South African mining industry not quite fulfilled, palladium was used to an increasing extent as a substitute for platinum and is proven to be price in 1938 turned to 1945 to about two thirds of platinum.

During the Korean War from 1950 to 1953 platinum again reached 2.5 times the price of gold, palladium, this increase did not, so it achieved in 1956 only slightly more than one-fifth of platinum. The almost 100 years most expensive platinum metal had become the cheapest, because Sudbury in Canada as the main support area of ​​the world as much as platinum palladium produced. Furthermore, the Soviet Union in 1946 appeared with large amounts of palladium on the world market. The increased production and use of palladium gave rise also a Altpalladiummarkt.

After palladium was initially mostly used in dental technology, it was established in 1922 with 51.3 percent of the total use preferred as jewelry metal. However, since the palladium price even more than the price of platinum - 1918 Palladium was rated only a quarter of the platinum price by 1.3 times platinum price in 1939 only with two-thirds in 1958 - had fallen, and the processing into jewelry went back and declined in 1956 to only 6.25 percent of total consumption. In contrast, the use took place in the Electrical (1925 = 10.5 percent, 1956 = 76.25 per cent of total consumption) significantly. Its use in dentistry, which in 1934 rose to 63.5 percent, palladium could only hold quantitatively in the 1950s and 1960s. In the chemical industry, the platinum palladium has not been able to replace at first because of its lower acid strength. Only after the Second World War, the use increased.

In the 1970s there was stagflation in developed countries with high inflation, weak economic development, low productivity and high unemployment. This period was characterized by a large uncertainty in the financial world oil crisis, a sharp increase in U.S. government debt, a massive expansion of the money supply and a flight of investors in property values ​​. Palladium prices grew between 1970 and 1980 by nine times. He climbed on 6 March 1980 at the New York Mercantile Exchange (NYMEX ) to a high of 332.00 U.S. dollars per troy ounce.

Two years later, on 21 June 1982 had to be paid for the palladium futures still 48.50 U.S. dollars. By 1996, the price has fluctuated.

21st Century

Late 20th and early 21st century, the original imagination of the precious metal was in use as a catalyst in the vehicle emission control. This led to a massive increase in demand for palladium and the formation of a speculative bubble. At this stage, investors were worried that it could lead to supply shortages. Palladium was still scarce by some producers in addition artificial, which triggered panic buying. On 26 January 2001, the palladium price marked with 1090.00 dollars an all time high. Since the price of platinum was quoted at 616.00 U.S. dollars per troy ounce on the same day, the palladium price was thus 1.8 times the platinum price.

The palladium for use in the automotive industry has been more and more by other components due to the high price - for example, platinum - replaced. At this time most investors sold their stocks of palladium, which the subsequent price decline still favored. From 2001 to the price of the precious metal fell further and further. On 17 April 2003, the exchange rate stood deep in New York at 145.00 U.S. dollars, up 86.7 percent. The platinum price was 1588.05 U.S. dollars in the course of trade to eleven times higher.

With the general rise in commodity prices, the palladium price rose continuously and reached again on 4 March 2008 a high of 595.10 U.S. dollars per troy ounce. In the wake of the financial crisis that began in 2007, the price dropped significantly. On 5 December 2008, the exchange rate stood at a low of 161.00 U.S. dollars. The crisis had to crash all investment classes. After that the price trend remained volatile. On 21 February 2011, a price of 863.70 U.S. dollars has been determined for the Palladium Futures. Eight months later, on October 5, 2011, the palladium price stood at 537.30 U.S. dollars.

Palladium market

Market mechanisms

Demand for palladium and palladium offer change frequently. Therefore, the palladium price is very volatile. That is, it varies considerably, even within short periods of time. The palladium price is traded in U.S. dollars and the dollar price is inversely proportional. So If the dollar rate, usually increases the palladium price.

A significant disadvantage of palladium (compared to the established precious metals like gold, silver or platinum ) is the reduced market liquidity, as there is for bullion coins made ​​of palladium, both less supply and less demand. The supply of certificates on palladium is much lower than that for the more established precious metals. This also usually leads to higher margins on the commodity exchanges and coin dealers, which may represent a disadvantage for investors. Potential benefits for long-term investors are less influenced by the price of traders and speculators.

Palladium is traded continuously at only a few exchanges. The palladium market is valued in U.S. dollars, much less than other precious metals markets. Flows much international investment capital in such a small market, it quickly comes to big price jumps.

Trading places

For the standardized palladium trading on commodity exchanges " XPD " was awarded as a separate currency code according to ISO 4217. It denotes the price of a troy ounce of palladium in U.S. dollars. XPD is published by the International Organization for Standardization currency abbreviation to be used in international payments for unique identification. The "X " indicates that this is not a currency of a state or confederation issued.

The International Securities Identification Number for exchange trading is ISIN XC0009665529. The Bloomberg ticker for the spot price of palladium is PALL .

Primarily futures are traded on the Tokyo Commodity Exchange at Palladium ( TOCOM ), but also on the New York Mercantile Exchange (NYMEX ). By 2000, TOCOM was the most important event for the palladium futures trading. This year, the trade in futures contracts were imposed drastic restrictions. Since then, the market turnover evenly distributed on the Tokyo and New York commodity exchange.

For the physical market ( palladium in bar form), the off-exchange trading (English: Over-The- Counter, OTC) is called, the London Platinum and Palladium Market ( LPPM ) the most important trading platform in the world. For trade only bars are approved by Affine Rien and mints that meet certain quality requirements. The international seal of approval "good delivery " ( German: " good delivery ") warrants to the imprinted or embossed features like purity and weight. Palladium Bars with Good Delivery status are accepted and traded worldwide.

Another market for the physical trade of palladium is Zurich.

On the spot market prices for immediate physical delivery traded, while prices for deliveries in the future shall be fixed on the futures and options markets. The spot price and the price of the futures are parallel in general.

Palladium Fixing

London has historically been an important center for this metal. Trade was introduced at the beginning of the 20th century, alongside the long-established bullion metals. 1973 led some metal dealer the " London Platinum and Palladium Quotation " one, the forerunner of the fixings. In this case, an indication of the platinum and palladium price was provided twice a day on the spot market. 1979 met leading dealer from London and Zurich an agreement to standardize the origin and specifications for the precious metals that they would accept as " Good Delivery " delivery. In 1987, the founding of the London Platinum and Palladium Market ( LPPM ). In 1989, the quotations of platinum and palladium were extended and expanded to full-fledged fixings. Since then, the platinum and palladium Fixing is conducted by telephone twice a day with the aim to complete as many transactions at a fixed price.

• Morning: Monday to Friday 9:45 UTC clock ( clock 10:45 CET)
• Afternoon: Monday to Friday 14:00 clock UTC (15:00 CET clock ).

The meeting will be held on any working day, chaired by the Standard Bank. One representative of the meet to attend this event

• Standard Bank PLC
• Engelhard Metals
• Goldman Sachs International
• HSBC Bank USA, NA London Branch and
• Johnson Matthey

All members of the London Platinum and Palladium Market ( LPPM ) are.

Palladium system

An investment in palladium can be done by physical buying and trading securities. The acquisition of palladium bars and bullion coins is possible in banks, precious metal and coin dealers. When storing in a locker of the Bank incurred rental and insurance costs. To the extent, however, many household insurance lockers stored valuables are locked up to certain maximum amounts in (bank). The purchase of bullion and coins from palladium subject to VAT.

Investors may invest directly in the market or in the broker certificates, funds or exchange - traded funds (ETFs ). Here, the physical delivery is eliminated. Certificates are dependent on the solvency of the issuer affect the demand situation on the commodity exchanges indirectly through the hedging transactions of banks ( Certificate → → Future Spot ).

Well-known bullion coins, for example, the palladium Maple Leaf and the Panda. Sierra Leone coined 1966, the first palladium coins. Tonga began in 1967 with the publication of the palladium coin Tonga Palladium Hau. Since then shaped a number of countries palladium coins: Australia, Bermuda, China, Cook Islands, France, Isle of Man, Canada, Palau, Portugal, Russia, Samoa, Switzerland, Slovakia, Soviet Union and U.S. Poarch Creek Nation. Most of them were special commemorative coins.

Platinum -palladium price ratio

The platinum - palladium ratio tells us how many units palladium are required to buy one unit of platinum. It shows the value ratio between the two precious metals. Since both metals are used in a similar manner, a comparison is meaningful. A low ratio value indicates an undervaluation of platinum compared to palladium to a high value, however, an overvaluation of platinum compared to palladium. In times of crisis, the palladium price breaks with its higher dependence on the industrial use often much stronger decline than the price of platinum. In the financial history to 1919 Palladium was the more valuable metal, however, the price of platinum was mostly about the palladium price since 1920.

Subsequently, the annual high, low and closing levels of palladium in U.S. dollars per troy ounce is specified. The data refer to 1976, the prices on the spot market in New York, then on the pricing of the palladium futures, where we began trading on the New York Mercantile Exchange (NYMEX ) on January 3, 1977. The table also shows the annual closing levels of platinum and platinum -palladium ratio in the same period. The table also shows the performance of both noble metals.