The price of palladium rose 96% in 2010 and has quadrupled over the past two years. And its rally appears to be far from over, as industrial demand is increasing steadily as the global economy recovers. Palladium is used in electronics and jewelry, and is increasingly being employed as an alternative to platinum as an autocatalyst in the catalytic converters of automobiles. As 2011 gets underway, major investment firms are making increasingly bullish predictions for platinum. UBS analyst Edel Tully thinks palladium could climb to $1,000 this year, due to growing investment demand. A January 12 Credit Suisse report states that growing demand could see palladium at $1200 an ounce in 2013, while a January 11 Deutsche Bank assessment predicts palladium could hit $1000 an ounce in late 2011 and $1450 by the end of 2012.
Platinum is a member of the 'platinum metals' family, along with ruthenium, rhodium, palladium,osmium, and iridium. Sometimes this precious white metal is even more costly than gold. It is used in autocatalysts, petroleum industry, jewelry, fuel cells, hard discs.With the strong demand for platinum, investors and consumers alike have driven up the price to almost double that of gold. With supply low and demand high, it seems the value of platinum won't end anytime soon.
George Gero, senior vice president at RBC Wealth Management, talked about palladium and platinum at Fox Business. ''I love the commodities that become user commodities and they are used up. And this is the economic recovery story,'' he said. “Platinum is much wider, much bigger market than palladium as it is traded four times more than that” he added.
Previously we have reported that Jim Rogers is extremely bullish about commodities. He said no matter what happens in the economy, commodities will benefit. Rogers owns gold, silver, palladium, and platinum. Bridgewater’s Ray Dalio is also extremely bullish about gold and other precious metals.
Hedge funds usually prefer physical gold, or gold ETFs such as SPDR Gold trust (NYSEARCA:GLD), Proshares Ultra Gold ETF (NYSEARCA:UGL), Gold Miners ETF (NYSEARCA:GDX), Junior Gold Miners ETF (NYSEARCA:GDXJ) and iShares Silver Trust (NYSEARCA:SLV). John Paulson, who made $5 Billion in 2010 from his hedge fund, also prefers Kinross Gold Corp (NYSE:KGC), Anglogold Ashanti (NYSE:AU), Novagold Resources Inc (NYSEMKT:NG), Randgold Resources (NASDAQ:GOLD), and Barrick Gold Corp. (NYSE:ABX). Dan Loeb’s Third Point recently purchased ETFS Physical Platinum ETF (NYSEARCA:PPLT) and Palladium ETF (NYSEARCA:PALL). Other ways of investing in these two precious metals are UBS E-TRACS Long Platinum ETN (NYSEARCA:PTM), UBS E-TRACS Short Platinum ETN (NYSEARCA:PTD), iPath DJ-UBS Platinum ETN (NYSEARCA:PGM), and First Trust ISE Global Platinum Index ETF (NASDAQ:PLTM).
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I am long physical gold