The Palladium Market’s High Volatility
Palladium, a Platinum Group Metals (PGM) member alongside rhodium and platinum, stands out for its more specialized uses. Its market often shows more volatility due to its supply constraints and demand fluctuations relative to gold and silver. For example, discovering a new palladium source or closing an existing mine can lead to significant price swings.
Challenges in Palladium Bullion Manufacturing
Palladium is relatively scarce in bullion form, mainly because it is more challenging to work with than gold and silver. Its melting point (1,555 °C or 2,831 °F) makes traditional smelting more difficult.
To produce palladium bullion, manufacturers often use powder metallurgy, a resource-intensive method. This process involves grinding the metal into a fine powder, pressing it into a desired shape, and heating it to bond the particles.
Notably, palladium has never been used as a monetary metal.
Palladium Is a By-Product of Other Mining Operations
Most palladium is obtained via mining operations for other metals, such as nickel and platinum. The primary sources of palladium are also geographically concentrated, with South Africa and Russia being the leading producers.
Palladium’s Specialized Applications
Palladium's most significant use today is in catalytic converters for cars. These devices reduce harmful emissions by converting toxic gases into less harmful substances. Its other uses include:
- Dental crowns.
- Hydrogen fuel cells because of their catalytic and hydrogen-absorbing properties.
- Finally, like rhodium, palladium is used to plate jewelry, providing a tarnish-resistant and lustrous finish.