For most the commodity Palladium is a pretty obscure investment. However it is going vertical and not without very good reason. Palladium and Platinum has been surpressed because they are key matrials in catalytic converters and the internal combustion engine has been judged as for the scrap heap and thence on to extinction. However tings have changed.
The US have gone 180 on energy and they have set a new course of energy maximalism. In this model the ICE ‘internal combustion engine’ does not vanish, it continues.
Y0u might ask why and the answer is AI. AI is going to take all available electricity and when you here Elon Musk predict AI will take all the energy in the solar system for starters and here Jeff Bezos talk about launching server farms into space you can scale that back and see it might make sense to keep gas guzzling going while the AI overlords fight for dominance and consume all possible energy sources in the process.
In his model Platinum and Palladium are key to remediate the environmental impact/ damage.
However there is a problem there is only 200 tonnes of new Platinum and Palladium dug from the group each year compared to 3200 tonnes of Goled and 25000 tones of Silver.
PGMs are very rare and only to be found in the US, South Africa and oooops, Russia.
Couple this with retail FOMO for all things precious metal and you have an explosive repricing setup.
So lets look at the chart of Gold v Palladium.
Palladium has been twice he price it is now recently and was running at parity with Gold for a fairly long period of time when it wasn’t zooming and crashing. Now its seriously lagging Gold. Not only could it go to parity it could go far further.
This maes it more ‘interesting’ than Platinum which would also do extremely well if it returned to 1:1 with Gold, its old relationship.
So in the short term the raging precious metal bull will drive Platinum higher, but long term the realities of the demand for environmental remediation created for the rush for energy in general and electricity in particular will drive Palladium and of course Platinum to new heights.
So right now his is the chart of Palladium.
Anyone at all interested in T/A will see the classic ballistic curve of a booming asset unfolding. It this is what you also see you also see that there is a lot of upside in this setup.
I wrote a similar piece months ago and then Palladium was well below 1000, as I have been very right so far I feel I take the risk in saying these are early days in the rally for Palladium. Yes, I did buy a lot back then and yes I still hold. If you prefer stocks to commodity ETF then you can look to Sibanye Stillwater SBSW, which I also hold.
The AI bubble as its called now is going to be multiple the scale of the dotcom and commodities that drive it will experience an impressive repricing.