CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

Palladium passes gold in value as Asia use increases

By Daniel Tyson

22:29, 7 December 2021

Man holding a raw nugget of palladium
Palladium is used in catalytic converters and semiconductors - Photo: Shutterstock

The precious metal palladium outperformed gold Tuesday after Asian manufacturers of computer chips recently restarted production lines, confident the pandemic is on the decline.

The commodity’s rise started Monday when it was on par with gold prices, hovering around $1,750 (£1,321) an ounce. By 5 am EDT (UTC-5) Tuesday, palladium was up to $1,850.50 an ounce and climbing to $1,858.50 by 3 pm. In comparison, gold struggled between $1,750-$1,800 Tuesday.

The metal is largely used in semiconductors.

“Palladium prices have not participated in what was supposed to be a super commodity cycle as the global shortage of semiconductor chips derailed its demand,” Edward Moya, senior market analyst for OANDA, told

Asian factories reboot

Recently, manufacturing facilities across Asia restarted their machines, producing everything from shoes to computer chips. Many Asian nations instituted a gradual return to work policy in late summer and early fall, bringing a bit of stability to the region’s manufacturing sector.

Additionally, the recent decline in gold prices has turned some investors away. For several weeks recently, gold prices were above the psychological $1,800 point, but with a strong US dollar and the US treasury department tapering stimulus spending, gold has become a less attractive investment.


2,004.85 Price
-1.180% 1D Chg, %
Long position overnight fee -0.0198%
Short position overnight fee 0.0116%
Overnight fee time 22:00 (UTC)
Spread 0.50

Oil - Crude

71.41 Price
+2.320% 1D Chg, %
Long position overnight fee -0.0204%
Short position overnight fee -0.0015%
Overnight fee time 22:00 (UTC)
Spread 0.030

Oil - Brent

75.98 Price
+2.030% 1D Chg, %
Long position overnight fee -0.0174%
Short position overnight fee -0.0045%
Overnight fee time 22:00 (UTC)
Spread 0.045


23.02 Price
-3.350% 1D Chg, %
Long position overnight fee -0.0204%
Short position overnight fee 0.0122%
Overnight fee time 22:00 (UTC)
Spread 0.020

Those are all favourable to the precious metal, said Moya.

“Palladium should start to stabilise now that supply chain issues are improving and as China starts to ease. Palladium is starting to look a lot more attractive than gold as its demand outlook is looking a lot better,” he said.

What is palladium?

The lustrous silvery-white metal jump initially surprised analysts, but later, many said it makes sense to see the jump in price given the wider acceptance of a cleaner, greener future. As hydrogen fuel cells and carbon capturing become more common, they are also pushing the price higher.

One of the main uses of palladium is in vehicle catalytic converters, where it serves as a catalyst to convert polluting hydrocarbons, carbon monoxide, and nitrogen oxide in the exhaust to water, carbon dioxide, and nitrogen.

Palladium coatings – electrodeposited or chemically plated – have been used in printed-circuit components. Palladium is also used in multilayer ceramic capacitors, according to various sources.

Read more: Palladium price analysis: Will lower auto demand further depress prices?

Related topics

Rate this article

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.

Still looking for a broker you can trust?

Join the 570.000+ traders worldwide that chose to trade with

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading