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Your guide to trade palladium

Learn how to trade palladium and find out everything you need to know about the top-traded precious metal commodity.
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Why is the palladium market important to traders?

Palladium is a silvery-white, lustrous metallic element. Together with platinum, ruthenium, rhodium, iridium and osmium is forms the PGM, or the Platinum group metals.

PGMs are extremely rare. According to the geological survey, the group accounts for only 0.0005 parts per million of the Earth’s crust. The six metals, comprising the Platinum metals group are highly valued for their superior catalytic features.

English chemist William Hyde Wollaston was the first who discovered palladium in 1803. The malleable shiny element soon gained popularity in jewelry production.

With the advent of modern emission standards for automobile industry, palladium transformed from a luxury metal to an essential commodity, preventing air pollution. 

Since 1989, palladium is mainly used for catalytic converters for automobiles, which trap hazardous emissions when an engine burns fuel. Auto makers use more than 75% of the total of 208,000 kilograms of palladium mined annually.

Palladium’s abnormal capacity to absorb hydrogen – 900 times higher than its own volume – makes it extremely valuable for nuclear industries.

Trade palladium

Palladium market trading hours

CME Globex provides electronic trading 24 hours/6 days a week:

  • Sunday to Friday, 6:00 p.m. – 5. p.m. with a 60-minute break each day. 

If you choose to trade CFDs, you can follow the palladium prices live in US dollars with the comprehensive palladium price chart with Capital.com:

  • Monday to Thursday, 00:00 – 21:00 and 22.05 – 00.00

  • Friday, 00.00 – 21.00

  • Sunday, 22.05 – 00.00 

How to trade Palladium?

There are several major reasons to trade palladium, however, the most common are the following:

  • Automobile demand

The automobile industry forms the most critical market for palladium. Investing in palladium you bet on surging demand for automobiles in the emerging economies, including China and India.

  • Supply constraints

Three quarters of the global palladium supply comes from 2 countries, which increases the possibility of supply shocks. The United States is a large palladium exporter, which has a long history of tensions with Russia. If Russia curtails its palladium exports, the metal’s price will surge.

  • Speculation on investment demand

Palladium commodity is a pretty new trading instrument if compared to other precious metals, including silver and gold. The more readers discover favourable supply/demand fundamentals for palladium, the higher are the prices. Thin liquidity can exaggerate price gains.

  • Diversification

The presence of the platinum commodity in an equity-only portfolio can lower the volatility, due to the absence of a correlation between the metal and other asset classes. Trading platinum CFDs is one way to try and profit from drastic palladium price fluctuations.

Palladium trading requires some consideration, due to the market’s occasional high volatility and a wide choice of available instruments, from palladium derivatives, such as futures and CFDs, to palladium mining company stocks.

Traders, who want to invest in palladium can consider trading a basket of commodities, including precious metals – silver and gold, base metals – copper and lead, agricultural commodities – dairy and grain, and energy. It will help them to protect their money from the volatility of a single commodity. 

Trading palladium can be extremely volatile resulting in a high degree of risk. The chance of making large profits goes hand in hand with the risk of large losses.

How to invest in Palladium CFDs?

One of the easiest and most popular ways to trade palladium is with CFDs.

A contract for difference (CFD) is a type of contract between a trader and a broker in order to try and profit from the price difference between opening and closing the trade.

Investing in palladium CFDs saves you the inconvenience of buying and owning the metal physically. in addition, CFDs give you the opportunity to trade palladium in both directions. No matter whether you have a positive or negative view of the palladium price forecast and predictions, you can try to profit from either upwards or downward future price movement. 

Trade Palladium Spot CFD

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Moreover, trading platinum through CFDs is often commission-free, with brokers making a small profit from the spread - and traders trying to profit from the overall change in price. 

Additionally, the 10% margin offered by Capital.com means that you have to deposit only 10% of the value of the trade you want to open, and the rest is covered by your CFD provider. For example, if you want to place a trade for $1,000 worth of palladium CFDs and your broker requires 10% margin, you will need only $100 as the initial capital to open the trade. 

Why trade palladium CFDs with Capital.com?

Advanced AI technology at its core: A Facebook-like news feed provides users with personalised and unique content depending on their preferences. If a trader makes decisions based on biases, the innovative SmartFeed offers a range of materials to put him or her back on the right track. The neural network analyses in-app behaviour and recommends videos and articles to help polish your investment strategy. This will help you to refine your approach when you trade palladium.

Trading on margin: Thanks to margin trading, Capital.com provides you with the opportunity to trade palladium CFDs and other top-traded commodities, even with a limited amount of funds in your account. 

Trading the difference: By trading palladium CFDs, you don’t buy the underlying asset itself. You only speculate on the rise or fall of the palladium price. CFD trading is no different from traditional trading in terms of its associated strategies. A CFD trader can go short or long, set stop and limit losses and apply trading scenarios that align with his or her objectives. 

All-round trading analysis: The browser-based platform allows traders to shape their own market analysis and make forecasts with sleek technical indicators. Capital.com provides live market updates and various chart formats, available on desktop, iOS, and Android.

Focus on safety: Capital.com puts a special emphasis on safety. Licensed by CySEC, it complies with all regulations and ensures that its clients’ data security comes first. The company allows clients to withdraw money 24/7 and keeps traders’ funds in segregated bank accounts.

Top palladium market businesses

Buying shares of mining and exploration companies is another popular, albeit indirect way of trading palladium. In times when palladium is rising, investors in palladium stocks can profit. A list of some of the key players in the palladium market includes the following businesses:

  • Norilsk Nickel

The world’s largest palladium producer. The company’s shares are listed and traded on the London Stock Exchange (LSE) and Moscow Stock Exchange (MCX).

South African company, engaged in the production and sale of PGMs. The company’s shares are traded over-the-counter (OTC).

  • North American Palladium Ltd.

Canadian company engaged in exploration of palladium, platinum, gold, copper, nickel and other metals. The company’s shares are listed and traded on the Toronto Stock Exchange (TSX). 

  • Platinum Group Metals Ltd.

Canadian company, specialising in the development of base and precious metal properties in Canada and South Africa. The company’s shares are listed and traded on the New York Stock Exchange (NYSE).

Palladium price history

Considered as one of the rarest metals in the world, Palladium has always been rather volatile. It is subject to both investment and industrial demand, which significantly drives its price. 

The major palladium commodity price drivers are:

  • Industrial demand

Palladium has diverse technological applications and is widely used in automotive and nuclear industries.

  • Chinese demand

China is the world’s top palladium consumer, which is capable to increase the consumption rate for years ahead. 

  • Investment demand

Today, more and more traders get exposed to precious metals. As silver and gold trading may become overcrowded, traders might search for new ways to gain exposure to precious metals, including palladium.

  • Energy costs

Mining becomes even more challenging business, as energy costs increase. In light of electricity and fuel costs rise, mining operations could close. This can result in higher palladium price.

The risks of investing in palladium include a global recession, which can weaken Chinese and US automobile demand, cheaper substitutes and global political and economic control. 

palladium price chart

In terms of historical price action, palladium market price hit its new all-time high of $1,783.21 in October 2019. The commodity’s record low of $78 occurred in August 1991.

Since the beginning of 2019, Palladium has gained 492.99 USD per oz or 39%.

The latest palladium trading price per ounce (oz) as of 24 October 2019 was $1,727.45

To follow the most recent ups and downs of the palladium spot price, check out our live palladium price chart.

FAQ

Until the 20th century, palladium was not widely used for commercial purposes.

In 1920s new deposits of this rare metal were discovered in South Africa and later in Canada. Soon, platinum and palladium got popularity in dental industry. After the discovery of palladium’s outstanding catalytic properties, it became essential to the design of catalytic converters.

Meanwhile, the top 5 countries, producing palladium, include the following: 

Rank

Country

Annual palladium production in kilograms

#1

Russia

82,000

#2

South Africa

73,000

#3

Canada

23,000

#4

United States

13,200

#5

Zimbabwe

10,000

South Africa owns more than 90% of the Earth’s platinum group metals.

The officially reported PGM reserves, held by each country are the following:

Rank

Country

Reserves in kilograms

#1

South Africa

63,000,000

#2

Zimbabwe

1,200,000

#3

Russia

1,100,000

#4

United States

900,000

#5

Canada

310,000

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