What are the main differences between palladium and platinum?

Palladium and platinum are less well-known as precious metals for investment compared to gold and silver, but they are still good investment options.

Although palladium and platinum look very similar in appearance (they are both silver-colored), there are also differences. Palladium is harder than platinum, which means it is less likely to get damaged. This makes palladium better suited for applications where durability is important, such as in the automotive industry and jewelry.

Platinum has a light, silvery white-grey color that gives a luxurious appearance. Palladium has a similar color but is slightly darker and less shiny, which gives it a modern look in jewelry designs.

Platinum is significantly heavier than palladium. It has a higher density, which makes it feel heavier and is often associated with luxury. Palladium is lighter and therefore more comfortable to wear in jewelry such as rings.

The historical performance of palladium and platinum as investments

The price development of palladium and platinum has shown significant differences over the past decades. This is mainly due to increasing demand from the automotive industry, supply constraints, and changing economic conditions.

The price of platinum reached a peak of approximately $2,300 per troy ounce in 2008, according to research by the World Gold Council, driven by high industrial demand and the limited supply of platinum.

After the financial crisis, the price dropped significantly and stabilized between $800 and $1,000 per troy ounce. This situation lasted until around 2020. In recent years, the price has risen again to above $1,200, partly due to increasing demand for catalytic converters and production challenges for both palladium and platinum.

Palladium experienced a sharp price increase starting in 2017. While the price previously remained below $1,000 per troy ounce, it rose to over $2,300 in 2020 due to a supply shortage and increased demand for gasoline engines.

In 2021, palladium reached a record high of over $2,800 per troy ounce. These trends show the strong price fluctuations of both precious metals, with palladium seeing a significant increase since 2017 thanks to growing demand for automotive catalysts.

Due to stricter environmental legislation and more emission regulations, cars are being equipped with increasingly efficient catalytic converters, which increases the demand for palladium and platinum from the automotive industry. The fact that more people are investing in palladium and platinum also contributes to the rising prices.

Which factors influence the prices of palladium and platinum?

Geopolitical influences, which have grown significantly in recent years, have the greatest impact on the prices of palladium, platinum, gold, and silver. Stricter regulations on mining production in many countries also have a strong influence. The fact that palladium and platinum can sometimes substitute for one another also plays a role.

How to choose as an investor between palladium and platinum?

Investing in palladium and platinum offers advantages and disadvantages. One benefit is that their value has developed positively in recent years, partly due to the rarity of these precious metals. Still, these metals are cheaper than, for example, gold, and their prices are relatively stable. Due to increasing competition, especially from gold, the price increases of palladium and platinum have somewhat leveled off recently.

The choice between investing in palladium and platinum should mainly be based on what you want to achieve. If you want to invest in a precious metal that is expected to strengthen further, then palladium is your best choice. According to research by the World Gold Council, this metal appears to be better positioned in the near future due to its lower cost and efficient use in the automotive industry. This way you run the least risk.

Do you need advice on investing in gold? Then contact The Silver Mountain for advice.

Disclaimer: The Silver Mountain does not provide investment advice and this article should not be considered as such. Past performance is no guarantee of future results.