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Silver and palladium may look similar to the untrained eye, but they are very different.
As an investor, the details matter. This guide is intended to teach you the similarities and differences between the two precious metals.
We look at what they are, how people and industry use them, and how each projects into the future.
We are here to help you make informed investment decisions.
Let’s take a look.
What Is Palladium?
Palladium is one of the four primary precious metals alongside gold, silver, and platinum.
Approximately 30 times rarer than gold, palladium is part of the platinum group metals, which includes palladium, ruthenium, osmium, rhodium, iridium, and platinum. Primarily mined in Russia and South Africa, the platinum group metals are sourced from the same ore and occur naturally.
Palladium’s primary use is for catalytic converters in the auto industry. It is also a prominent material in jewelry-making.
Additionally, palladium is sometimes used as an investment vehicle. Investors acquire palladium bars and coins through direct-delivery or in a precious metals IRA. We touch on these methods a little later.
Palladium is valuable to investors looking for:
- A potential long-term investment and store of dollar value
- Tangible asset ownership and portfolio diversification
- A price increase over time and a speculative investment that may be worth more in the future
What Is Silver?
Shiny and grayish white in color, silver is a precious metal.
Industry covets silver because it is the most thermal and electrically conductive precious metal. Silver is malleable and durable, making it easy to shape and form for a myriad of uses.
Silver’s other primary precious metals group members—platinum, palladium, and gold—are rarer, but modern technology more heavily relies upon silver. Many of the electronics in our daily lives would not exist or function properly without silver.
As an investment, silver is available in bars and coins. The precious metals IRA allows ownership of IRA-approved precious metals—including silver, gold, platinum and palladium—using funds already earmarked and set aside for long-term investing.
Investors with cash who want immediate possession of silver choose direct delivery—cash purchase—of their metals. Direct delivery is simple and fast, and your metals arrive at your doorstep.
Palladium vs. Silver: Investment Comparison
Evaluating silver vs. palladium as an investment tool is like deciding between a family car and a sports car.
Silver is the old guard. It has driven from point A to B since the time of ancient civilizations. It doesn’t need much maintenance and has always proven reliable.
Palladium is a two-seater that may not fit everyone. Perfectly tuned, it runs hard and fast. But it is limited, and one flaw in the system may leave you stranded on the side of the road.
Palladium vs. Silver: Price
Supply and demand is the primary factor driving the prices of precious metals. Silver and palladium seem to be on different paths.
Silver has trustily inched upward. Palladium has tumbled.
Per-ounce silver prices have moved from a low of under $18 in 2022 to as high as $26 in 2023. As of late 2023, silver sat at almost $25.
Palladium once led the way for the primary precious metals with an all-time high of $3,440 per ounce in 2022. Gold was priced near $1,900 at that time, and palladium was 70% more expensive.
Demand for palladium has since fallen. Late 2023 found it trading at about $1,000 per ounce.
Silver occurs more abundantly in nature than palladium, is more in demand, and is more affordable per ounce.
Geopolitical uncertainty is a reason investors turn to safe haven metals like gold and silver. Silver’s 10% rally in October 2023 was partly caused by unrest in Eastern Europe and the Middle East.
Palladium vs Silver: Investment Methods
Investing in silver and palladium is easy.
If you already own a tax-deferred retirement account—such as an IRA or eligible 401(k)—you can own IRA-eligible physical palladium and silver.
You can transfer any IRA to a precious metals IRA—also known as Silver IRA or Gold IRA. The Silver IRA gives you the option of owning physical assets like silver and palladium, as well as paper-based assets. It functions just like a traditional individual retirement account—the same rules apply.
If you are 59 ½ and own a 401(k), or if you have a 401(k) from a previous job, your account is eligible to roll over into a self-directed precious metals IRA.
Both the IRA transfer and IRA rollover are tax-free and penalty-free.
Palladium vs. Silver: Applications
Silver and palladium are used to manufacture jewelry and coinage.
Both make beautiful settings for gemstones but sell at vastly different price points. For high-end jewelry pieces, palladium is more expensive and preferred over silver. It is more durable. Unlike silver, palladium doesn’t tarnish or lose its shape.
Silver has more industrial utility. The tech, electronic, and computer-based world uses silver in:
- Anti-bacterial coatings
- Cell phones
- Water filtration
- Electrical contacts
- Home electronics
- Medical instruments
- Film
- Solar panels
- Laptop computers
- Circuitry and switches
Palladium is used in:
- Catalytic converters
- Jewelry
- Dental fillings
Palladium vs. Silver: Future Market Trends and Speculations
Palladium’s success is tied to the automobile industry. As green movements shift cars from gas-powered to electric, there is downward pressure on palladium demand. Electric cars and many trucks don’t need catalytic converters.
Silver, on the other hand, is seemingly called on more and more to make our lives run smoother, more efficiently, and environmentally cleaner. Solar panels and electric vehicles use silver. Computers that run the panels and vehicles use silver. And hand-held devices that put the world at our fingertips use silver.
Silver usage and demand are near all-time highs. Many experts predict silver will remain in high demand for the foreseeable future.
Pros and Cons of Investing in Silver vs. Palladium
The physical nature of silver and palladium is where their similarities end.
Understanding the pros and cons of each is important when deciding which is best for you.
Investing in Silver Advantages and Drawbacks
Some advantages of a silver investment are:
- Silver truly diversifies your portfolio. Most portfolio assets are paper-based—stocks, bonds, treasuries, certificates of deposit (CDs), and exchange-traded funds (ETFs). Silver is a real, tangible asset that you can hold in your hand. It is not correlated to the stock market, and historically performs well when stocks hit turbulence.
- Silver is a safe-haven investment. Investors turn to silver and gold to protect their wealth. Geopolitical strife and economic uncertainty drive investors to move from paper-based assets to value-preserving silver.
- Silver acts as a store of wealth. During inflationary periods or times when monetary policy dictates printing more money, silver holds value. The price of silver typically rises alongside the price of goods when inflation hits, helping silver maintain its purchasing power.
Silver’s disadvantages include:
- Silver doesn’t pay a dividend or generate interest. Its price is supply and demand-driven. There is no guaranteed rate of return.
- Silver has widespread industrial uses. Its price can decline during periods of slow economic growth or economic downturn.
- Silver requires storage. You must safely secure and insure your silver, which comes with a price.
Investing in Palladium Advantages and Drawbacks
Pros of investing in palladium include:
- Palladium relies on the automobile industry and the auto industry relies on palladium. Catalytic converters cut down on harmful gasses emitted by vehicles. Cars, trucks, and buses must have converters to operate. As long as demand for gas-powered vehicles is strong, palladium has a home.
- Palladium bars and coins are real, tangible objects that you can hold in your hand. Physical palladium belongs to a different asset class than paper-based investments. You can achieve true portfolio diversification by owning non-correlated assets that balance each other out.
- Palladium is only mined in a few places across the globe. It is rare. Economic or geopolitical events in those countries can squeeze supply of the metal and cause sudden price increases.
Some cons of palladium investing include:
- Palladium has limited use in industry. Outside of the auto industry, palladium has a short list of uses. As legislation and public sentiment push automakers to create cleaner and greener vehicles, palladiums demand lessens.
- Low consumer demand for palladium. You may encounter difficulties liquidating palladium if not in a major market.
- Palladium experiences volatile swings in price. Price movement is your best friend or worst enemy—depending on the side you’re on. If you need to liquidate in a down market, palladium may take more time to correct than a more in-demand metal.
Should You Invest in Silver or Palladium?
Comparing palladium vs. silver is like comparing apples to oranges. They are both fruits, but they satisfy different tastes.
If silver and palladium fit your long-term investment goals, they come with a benefit that paper assets don’t. Physical precious metals are nearly indestructible, and cannot disappear at the touch of a button. They have been here nearly as long as the Earth has, and barring a catastrophic event, precious metals will be here long after us.
Metals provide a physical asset foundation for your paper assets to lean upon.
The experts at Advantage Gold help clients own physical gold, silver, platinum and palladium.
We show you how easy it is to acquire and own physical wealth—whether in an IRA or directly delivered to your door.
Click the link and let us know how to contact you. Better yet, call us directly right now.
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