Source: Stas1995 / CC-BY-3.0

Platinum and palladium are a part of what is referred to as platinum group metals (PGMs). Platinum has the lowest melting point of all PGMs, but it is also the least dense. Palladium's remarkable qualities include its relatively high melting point, high-temperature stability and corrosion resistance. It is also a good oxidation catalyst. It is conductive, oxidation resistant and ductile when annealed. It also has the ability to absorb 900 times its own volume of hydrogen at room temperature, which has led to its use as a hydrogen storage medium and purifier as well as a catalyst when producing butadiene and cyclohexane, the raw materials for synthetic rubber and nylon.

PGM metals are generally considered more valuable than gold as they are found deeper in the Earth’s crust and are more expensive to mine. On the other hand, the market value is highly volatile and there has been a price inversion that has been somewhat steady over the past six months as gold demands remain steady and platinum has been undervalued.

Palladium can be considered the new fruit in the market, and while it has never been valued over gold, its market value rallied past platinum in 2017 and may be part of platinum’s demise. Palladium was the best performing commodity of all of the raw materials that traded on U.S. exchanges in 2017 posting an incredible 56.08 percent gain.

Platinum is a denser metal with a higher boiling and melting point. Palladium has historically been sourced as a cheaper alternative to platinum. In 2018, consumers may begin replacing palladium requirements with platinum as it is no longer a cost-effective solution. The substitution could be the trigger that eventually causes platinum to rebound with an expected price correction.

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Palladium

Platinum And Palladium In 2018 — Mean Reversion Is Long Overdue For The Laggard