The economic recession and fluctuating stock market has caused many investors throughout the country to reconsider the investments that are found within their portfolios. The value of the US dollar continues to decline with each passing year, which has inadvertently convinced investors to focus on transferring those funds into tangible assets of value. When it came to investing in precious metals, quite a few people spent substantial amounts of money buying palladium in the past to stave off inflation and pave the way for profitable returns in the future. Even though it is understandable why they have changed their minds, there are several key reasons why this is still a solid investment.
The Decline of Industrial Demand
Studies that have been recently conducted by market analysts and industry experts have all proven that the industrial demand of palladium has declined almost at the same pace of the available supply of this precious metal around the world. Once automobile manufacturers throughout Europe began to scale back on buying palladium for their industrial needs, the entire market began to suffer.
They no longer need to invest as much money in palladium anymore simply because they have turned to recycling these metals from old junk cars instead, which is more cost-effective and can potentially save millions and even billions of dollars in the years to come. This is why even though industry studies and reports have projected that these automakers will start buying palladium more in the future they are able to save this money through efficiently recycling, which has caused the overall demand to suffer as a result.
A Better Investment Opportunity than Gold
The value of gold has clearly been declining as well in recent years. Even though this precious metal still has future growth potential, that is nowhere near as high as it has been in the past. Buying palladium is still a much wiser investment choice that should be seriously considered in comparison to gold primarily because of the limited supply of this particular metal that enters the market worldwide with each passing year.
When compared to gold, there is less than 17 percent of brand new palladium that is mined each year and placed within the global market for circulation purposes. This limited supply allows it to be a much more stable investment on a long-term basis that is also able to retain a substantial value.
A Sign of Positive Growth
Before you decide to completely give up on buying palladium, it is imperative that you take its future growth potential into serious consideration. Studies have proven that the market for palladium is changing slightly in a positive direction, which can essentially pave the way for exponential growth in the near future. The effectiveness of recycling automotive parts is beginning to decline but the autocatalytic demand was able to increase by 7 percent in 2012 alone. Quite a few countries, including India and China, are beginning to use palladium as an efficient alternative to platinum within their emission-control systems that are used to build gas-powered motors. Along with the increasing demand within the automotive industry, buying palladium jewelry has also started to become an emerging trend that will continue to grow in the future.
It is clear that buying palladium might not seem to be the greatest investment choice right now. Many people are actually losing money because of investing in this precious metal in today’s market. However, the value of a good investment is not necessarily what is experienced in the present but, more importantly, in the future. Even the slightest increase of industrial demand within the global market should turn buying this precious metal into a solid choice for the average investor.