Trade on Palladium
It is not kryptonite, and we hope it cannot harm any superhero, however it still is one of the rarest metals on earth. Palladium CFD trading online have had some major changes over the years, and has surged in over 500% in the beginning of the 2000s.
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The Palladium Market
The palladium market is open from 23:00 to 21:59 GMT Monday to Friday, and is traded on the New York Mercantile Exchange (NYMEX). Most of the Palladium mined, around 60%, goes to the auto industry. Other consumers of palladium are jewelry, electronics and dentistry. The price of palladium is determined against the USD, even though most of the mined palladium doesn’t come from the US. Palladium is counted in Troy Ounce, and the minimal amount needed to commence a trade is one ounce.
What Influences the Price of Palladium?
As one of the rarest metals that exist on the planet, its price had seen fluctuations that might not be common for most instruments. From a price of 168 USD in 2001, palladium rose to 858 USD in 2005 – a span of about 4 years, a change of over 500%. So what can cause changes in palladium price?
- As Russia supplies nearly 50% of the global usage of palladium, and another 30% is provided by South Africa, they gain control over the market and can affect the price. Another part is that Russia refuses to reveal how much palladium they have stored and how much is mined, therefore it is unknown how much they will supply in future years. Low estimates can bring on a rise in price.
- The general political and economic state can always affect the different markets, however the fact that two countries only are the main suppliers has even more risks. A change that will affect one of them, especially Russia, can cause an upheaval in the palladium market. It is important to remember that often metals are linked to one another, so a dramatic change of palladium price might also result in other metals’ prices changing.
- As mentioned before, some 60% of palladium usage goes to the auto industry. As more people buy and use cars, the price of palladium will rise as the demand rises. It is also true, naturally, to other industries who consume palladium, but as the auto industry is the main one by far, it has the most effect on its price.
Trading Palladium with AvaTrade
As a unique and rare metal, palladium holds within it some exciting options. Its volatility is not high; yet traders do favour palladium trading. Knowing that, AvaTrade offers its clients trading this rather rare instrument, while enjoying the all the top services provided by AvaTrade. Join AvaTrade today and start trading on over 250 instruments, including palladium and other rare trading instruments.
- Up to leverage on palladium CFD online trading
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- An internationally regulated broker
- Access a choice of trading instruments, including stock trading, commodities, forex trading online, cryptocurrencies, bonds, indices and ETFs.
Palladium Trading Main FAQs
- Why should I trade palladium?
Traders who like gold and silver because they are both rare and valuable will really appreciate palladium as it is one of the rarest metals on Earth. Palladium is over 30 times rarer than gold, and in addition to its role as a precious metal it also serves as an industrial metal, with some 60% of all palladium being used in the automotive industry. That connection actually makes it easier to trade palladium since its price often follows trends within the auto industry, rising when car sales are hot, and falling when the auto makers are struggling.
- Is palladium the best precious metal to trade?
The price of palladium was rising strongly from 2016 to 2019, and many traders took advantage of that trend in which palladium tripled in price. A correction was forced by the rise of the coronavirus pandemic, but palladium could be the first metal to recover as supplies of the grey metal have lagged demand for nearly a decade. That could give traders another excellent opportunity in this most rare of precious metals.
- What is the best palladium trading strategy?
Fundamentally palladium looks to be in an excellent position, with automotive demand continuing to grow, supplies of the metal constrained, and investment interest in the market growing. That could make a trend following strategy very useful. Buying on breakouts of dips will allow traders to capture most of the upside potential in palladium. Increasing demand from China and India will help prices, but because supplies of palladium are also limited the metal faces a strong uptrend that could last for years to come.
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