The History and Value of Palladium

Palladium is currently a buzz-worthy precious metal in terms of investment as a result of its relative obscurity, immense industrial usefulness, dwindling supply, and increasing demand.

 

 

Palladium was officially discovered in 1803 and named after the asteroid Pallas. However, its earliest documented existence dates back to 1700 when Brazilian miners dubbed its alloy with gold “worthless gold”. The metal, however, was extracted for the first time in 1803 by William Wollaston when he dissolved platinum in a solution of nitric acid and hydrochloric acid. Palladium was then extracted from the residue left behind by the dissolution.

Palladium, as it now stands, is a shiny and silvery metal completely resistant to corrosion. It is non-toxic and has no discernible biological role. Even though it is one of the four primary precious metals (gold, silver, platinum, and palladium), it is relatively obscure largely because of its secondary role in jewelries. In terms of ornamentation, its only real purpose is to form “white gold” when alloyed with gold.

Lack of ornamental value renders palladium obscure as far as precious metals are concerned. However, it serves a number of industrial functions that render it invaluable as an asset for investment.

The following are some of the most important functions of palladium:

  • Palladium serves as a catalytic converter in automobiles and engine-driven machines. The basic function of a catalytic converter is to convert toxic substances present in engines into inert substances, thus producing clean exhaust fumes and meeting EPA standards. There are a number of different substances that can be used as a catalyst for this function, but palladium is the cheapest and most abundantly available catalyst.
  • Palladium also serves a crucial function as a multilayer ceramic capacitor. A ceramic capacitor is made of two or more alternating layers of ceramic and a metal — in this case palladium — that act as electrodes. These are widely used in electronic devices like cell phones, laptops, TVs, etc. These are also used widely as power capacitors in transmitters. In addition to this, palladium is also used for connector plating in electronic devices.

The aforementioned functions are currently the most popular uses of palladium. However, palladium is also currently being studied for its potential in supplementing hydrogen shortage and in fuel cells. Furthermore, palladium’s value is likely to continue rising at an exponential rate as technology continues advancing. In light of this, palladium is rightfully being hailed as the metal of the future, which makes it a great potential asset for investment.

Since around 1965, the primary producers of palladium have been Norilsk Nickel as they produce half of the world’s supply of the precious metal. Back when they started, an ounce of palladium was worth just around $100. However, in the past couple of decades — with the advent of technology and the discovery of its value as a catalyst in motor exhausts — the value of palladium has skyrocketed and is now sitting at around $1200. With over a 500% gain in the past 10 years, Palladium has become one of the most desirable metals on the market.

As it now stands, auto emissions catalysts are using up almost all of the mined palladium, so much so there’s more demand than supply at this point. Furthermore, this demand is likely to continue rising in the future. Automobile companies need palladium and can afford to pay a lot more so a bidding war has broken out for the limited supply of palladium. As such, it is stipulated that an ounce of palladium might soon be worth thousands of dollars and continue rising incrementally.

The price for any given commodity increases when either the supply falls or if the demand increases. For all of the aforementioned factors, palladium is currently experiencing both dwindling supply and increasing demand. As a result, palladium is currently one of the most valuable and prospective precious metals as far as investment is concerned.


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