Is Palladium a Good Investment?

Posted - December 29, 2023
is palladium a good investment

Is palladium a good investment for your portfolio? 

Palladium is among the newest precious metals discovered by humans. While the first 200 years following palladium’s discovery were uneventful, the metal has become one of the most valuable precious metals on the market. 

In this guide, we’re going to explore why palladium has quickly gained popularity as a premier bullion product. Hero Bullion’s vast inventory of palladium products has helped countless investors expand the diversity of their portfolios using quality bars and coins. 

Is palladium a good investment, or is it overrated? Palladium is a good investment to add to your growing portfolio for a few different reasons. Namely, palladium products combine beauty, purity, and an unprecedented level of industrial demand to create an unparalleled investment opportunity for precious metal collectors. 

What is Palladium?

We’ll start with the basics – what is palladium? Palladium is a precious metal discovered in early 1802 by English chemist William Hyde Wollaston. Today, the metal is one of the most in-demand industrial precious metals. 

Palladium is used in a number of important industries; you’ll find it in automobiles, medical technology, and even some smartphones! 

Even more than that, a growing number of investors consider palladium a great choice for portfolio diversification. While this metal appears similar to silver and platinum, it has a distinct look and feel. More importantly, the metal has occasionally outperformed even gold and platinum. 

Is palladium a good investment for your future? To answer this question, we’re going to need a bit more information about the history of one of the world’s most valuable precious metals. 

History of Palladium Bullion 

Like we mentioned earlier, palladium was discovered by English chemist William Hyde Wollaston. He named the metal inside of his laboratory journal that year and was able to purify it for sale in a South London shop. 

The world wouldn’t understand the true value of palladium for nearly 150 years. Initially, the metal was used to treat tuberculosis. Needless to say, this wasn’t actually a successful experiment. While that marked the end of palladium’s use as a medicine, it would only be the beginning of palladium’s successful history in the development of medical technology. 

When Was Palladium Discovered? 

Palladium was discovered in 1802. This makes it one of the newest precious metals to be added to the periodic table. It belongs to the platinum family of precious metals. For reference, platinum was discovered in 1735, nearly 100 years before Wollatson first discovered and purified the subject of today’s article. 

As you know, gold and silver were discovered thousands of years earlier. Most archeologists believe that gold was likely first discovered in 2,450 B.C. by the Ancient Egyptians. Silver was discovered even earlier, when it was mined in 3,000 B.S. by miners in what is now Turkey. 

Why is palladium a good investment? While palladium wasn’t a popular precious metal until the recent century, it’s become a fantastic choice for diversified investors. 

What is Palladium Used For?

Is palladium a good investment? When we address the investment potential of precious metals, there are several things we need to consider. The metal’s beauty, average spot price premiums, and popular products made with a precious metal all contribute to its value as an investment.

Argor-Heraeus 1 oz Palladium Bar Front
Argor-Heraeus 1 oz Palladium Bar

But there’s another factor we think investors should keep in mind when trying to determine: is palladium a good investment? This factor is industrial demand. 

Palladium offers perhaps the highest industrial demand in the entire precious metals market. Even when we compare it to platinum, gold, and silver, palladium stands far above its peers in terms of how useful it is to industry. 

We find three main industrial uses for palladium: fuel cells, palladium bullion and jewelry, and vehicles and automotive technology. 

Fuel Cells 

Palladium is able to effectively purify and store hydrogen cells. This makes it extremely useful in the production of fuel cells. Most of the fuel cells that the industrial sector needs use hydrogen, and they operate best with the purest hydrogen possible. 

Because of the unique role palladium plays in the purification of hydrogen, the precious metal is constantly in high demand for the production of fuel cells. In fact, this is one reason why global demand for palladium bullion nearly tripled at the onset of the 21st century. 

Is palladium a good investment because of its use in fuel cells? We think so, but palladium’s second industrial application paints an even clearer picture of the metal’s versatility in industry. 

Palladium Bullion and Jewelry 

Bullion and jewelry are two of the main industries that use palladium. While we believe palladium is a good investment because of its industrial demand, it’s clear that quality palladium bars and coins make up a solid chunk of the metal’s global demand. 

Is palladium a good investment in the form of coins and bars? A growing number of investors say yes. Demand for palladium bullion products has skyrocketed in the past few years. As gold prices continue to rise, it seems that palladium may be an affordable – and profitable – way for investors to put their money into solid precious metals. 

It’s important to remember that palladium looks quite a bit like platinum. Seasoned stackers should be able to tell the difference by looking closely at the “shine” of both these different metals. But even if you don’t physically own both palladium and platinum, it is clear that these products are distinct. 

One major difference between palladium and platinum is the former’s excellence in the automotive industry. 

Vehicles and Automobile Technology 

For decades, platinum was the primary precious metal used in catalytic converters. This actually happens to be a big reason why so many thieves love to steal the catalytic converters out of cars. The high precious metal content of these expensive car parts can sell for good money on the secondary market. 

But in the past two decades, vehicle manufacturers have begun to see the benefits of using palladium in catalytic converters and other automobile technologies. 

The reason why palladium may be the better choice for use in vehicles is a bit complicated, but we’ll try to explain it in clear terms. Basically, palladium is able to do the same thing that platinum can – but at much lower temperatures. This means that catalytic converters don’t need to get as hot in order to serve their function. 

This translates to a few big benefits: catalytic converters made with palladium instead of platinum offer better fuel efficiency, improved performance, and even a diminished impact on the environment. 

Valcambi 1 oz Palladium Bar Front
Valcambi 1 oz Palladium Bar

Is Palladium a Good Investment? 

Let’s get back to the basics. Is palladium a good investment? To answer our main question, we’ll need to take a look at the pros and cons of investing in palladium coins, bars, and jewelry. 

Pros of Investing in Palladium 

Palladium offers 3 main advantages: a beautiful appearance, excellent historical price trends, and high industrial demand. Together, these three benefits explain why palladium is a good investment for the average precious metal stacker. 

Beautiful Appearance

Like the other precious metals for sale at Hero Bullion, palladium is exceedingly beautiful. Why is palladium a good investment? To some consumers, the metal is valuable because it’s beautiful. 

A growing number of mints have begun producing quality palladium coins and bars. Even the United States Mint now sells an American Palladium Eagle, which is struck using .9995 pure palladium bullion. While there is most definitely a limit to how many palladium bullion products are available in today’s market, the coins we have are really something special. 

Is palladium a good investment just because it’s beautiful? Palladium offers another couple of benefits that can help you better prepare for putting your money on this brilliantly shiny precious metal. 

Excellent Price Trends 

The second big benefit to buying palladium is the history of price appreciation it offers. Believe it or not, palladium bullion has occasionally been worth even more than gold! These price trends have a lot to do with the metal’s high level of industrial demand. 

We recommend that consumers interested in buying in-stock palladium coins and bars take a look at historical price trends for the precious metal. Since December of 2013, palladium’s value has increased by nearly $600.

This doesn’t even come close to palladium’s price when it hits an all-time high, however. In March of 2022, palladium hit a high of just under $3,000, eclipsing even the value of gold bullion. 

We can’t guarantee that palladium will ever hit such highs again. During 2022, its price spike was due to a combination of diminishing production from mines and skyrocketing demand on the part of the automotive industry. 

Still, the historical price trends associated with palladium makes it one of the best investments on the precious metals market. Why is palladium a good investment? When we combine its historical price appreciation with palladium’s exceptional industrial demand, we get a clearer picture of why palladium has come to dominate the precious metals market. 

High Industrial Demand 

High industrial demand is likely the biggest reason to invest in palladium. Why is palladium a good investment for 2024? If you ask us, the precious metal’s various industrial applications make it a versatile addition to your portfolio.

Palladium is used in a variety of different industries. 

Take a look at some of the most important industries you use every day. If you take advantage of electronics, medicine, chemistry, groundwater resources, jewelry, or dental care, you can thank palladium for it. Is palladium a good investment because of its industrial demand? Not necessarily, but we’re bullish on palladium when we combine its industrial demand with the metal’s other positive traits. 

We recommend taking a closer look at global demand for palladium to get a better idea of its long-term outlook. During periods where green automobile technology is in high demand, expect that palladium’s prices will climb. 

Cons of Buying Palladium 

There are a couple of downsides to investing in palladium, too. Is palladium a good investment? Not always. The 2 main cons of investing in palladium include its spot price volatility and an exceedingly limited product selection. 

Volatile Prices

Volatile prices should be nothing new to you, at least not if you’ve spent time trading precious metals. Metals like gold, silver, and platinum can be notoriously volatile. Usually, these metals are volatile in the short term but much more stable on a long-term basis. This is why we generally recommend investing in precious metals over a long time horizon

Canadian Palladium Maple 1 oz Coin - Random Date Reverse
Canadian 1 oz Palladium Maple Leaf Coin

Is palladium a good investment in the long term? We tend to think so. Short-term speculation on any precious metal is a bold proposal, considering the high volatility associated with bullion products. The value of gold, silver, platinum, or palladium can crash at a moment’s notice. 

Still, palladium tends to be a good investment for collectors who are willing to sit on their precious metal for a while. Whether you choose to buy palladium coins, bars, or jewelry, palladium’s long-term price history is impressive – to say the least. 

Limited Product Selection 

Unsurprisingly, palladium doesn’t offer quite the same variety of coins and bars that you’ll find for gold, silver or platinum. Very few government mints produce palladium coins, and the coins they do have are limited in variety. Is palladium a good investment? If you’re looking for wide variety, palladium may not be the best option for you. 

Still, you do have some great options when it comes to government-minted palladium coins. The Canadian Palladium Maple and American Palladium Eagle are two fantastic choices. We recommend adding palladium to diversify your precious metals portfolio. While the metal is relatively new, it’s quickly becoming more popular among investors everywhere. 

Final Thoughts: Is Palladium a Good Investment For You? 

So is palladium a good investment or not? Our verdict is that palladium is a versatile precious metal that can do quite a bit to help you diversify and expand your precious metals portfolio. 

Is palladium a good investment for your future? That’s for you to decide. Hero Bullion offers competitive prices on all of our palladium coins and bars to help you continue to build your stack with confidence. 

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About The Author

Michael Roets is a writer and journalist for Hero Bullion. His work explores precious metals news, guides, and commentary.