“Palladium is expected to be the top performing precious metal, because of its use in auto catalytic converters in small-engine, gasoline-driven cars,” said Patricia Mohr, vice-president at Scotiabank Group. That statement, made in response to more and more demand for automobiles in China, India, and other Asian markets, is part of what had driven palladium to incredible highs in 2010 and promises to deliver strong demand again in 2011. Many readers will remember that palladium is a key element used in gasoline-powered automobiles, working in the catalytic converter as part of the emissions control for the vehicle. This demand for more automobiles, coupled with fears that Russian stockpiles of the metal were going to be exhausted, drove the price of the precious metal to levels not experienced in over ten years. This year alone palladium prices nearly doubled in price, reaching $825 per troy ounce, and a poll of 45 precious metal investment analysts predicts the median price for 2011 will be $795. Such stability should continue to make palladium a wise investment option. The rapid growth it has experienced in the last year also helped palladium outshine all the other precious metals, including gold, silver, and even platinum. While 2011 promises to be yet another glittering year for palladium, there is some caution regarding the precious metal as large countries such as China are forced to embrace cleaner and improved emissions systems for automobiles, systems that sometimes favor platinum over palladium. Likewise, the prospect of additional supply increases of the precious metal from Russia could also dampen prices somewhat. But even with these factors that could possibly reduce the price of palladium, the precious metal is expected to shine brightly in 2011, making it a solid investment strategy for the year ahead.
While other commodities such as crude oil continue to show price gains, gold and silver prices have lagged behind as both gold and silver have held steady or shown modest price drops in recent weeks. Some economists attribute this lack of change in gold or silver prices to growing financial optimism around the world and occasional increases in the strength of the dollar. Investors can find solace, however, in other precious metals. Palladium, for instance, has demonstrated solid growth, recently hitting a ten-year high and closing at $812. per ounce, just off the price of $814.50 established in 2001. And many economists and financial experts believe that palladium’s price will continue to grow this year. Some estimates for palladium predict the precious metal will spike at over $1,100 in the days and months ahead, making it an excellent short-term investment as we continue to pull out of the recession. This estimated growth is a combination of a variety of factors, including supply disruptions of palladium from Russia and South Africa and lower-than-expected worldwide stockpiles of the precious metal. Also driving the price gains will likely be that growing demand for cars in China, where palladium is used in in pollution control devices and electronic components. The projections for palladium could be even higher for 2012 and 2013, with prices as high as $1450 possible according to Deutsche Bank. However, there could be a price withdrawl in palladium if the United States institutes laws or promotes a steep growth in electric cars, which do not emit exhausts and require palladium-based catalysts.