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Palladium and uranium should outperform other metals

Palladium supply is highly constrained, with Russia controlling most of it. Russia may decide to stop exports of palladium soon, which would put severe pressure on available supply. At the same time, demand for palladium is increasing from industrial uses. Palladium is sometimes used as a cheaper substitute for platinum, which is becoming extremely expensive. This provides an additional reason for demand to shift from platinum to palladium. The best way to play this in the short run is either to go long the palladium exchange traded fund PALL or, with some additional risk but also more upside, North American Palladium PAL.

Uranium also has excellent fundamentals on the demand side with nuclear energy set to expand dramatically in the next several years. China in particular is planning a major expansion into nuclear energy, but so are many other countries. Uranium supplies are limited as well. Uranium cannot be easily substituted with anything else. Further, uranium prices are still far below their highs set a few years ago. The best way to play uranium is to own the exchange trade fund URA.

Other important reasons palladium and uranium should outperform other metals such as gold, silver, platinum, or copper is that they have attracted much less speculation and retail investors interest so far. This provides much more upside if the speculators and retail investor money does decide to jump on the wagon in the future.

Disclosure: PAL URA