Steadily Rising Palladium Prices: A New Safe Haven?

Michael Teague  |

Palladium prices have been on the rise since the last week of 2013, when the precious metal closed Christmas eve trading just beneath $695 per ounce.

A slew of relatively positive global economic news since that time has been sending palladium higher, however, and the metal was up another half percent on Tuesday, continuing on its steady inclining path to $742 per ounce, seemingly in line with 2014 analyst price targets of between $800 and $900 per ounce according to Bank of America (BAC) , HSBC, Citigroup (C) , and Commerzbank.

As a result, the US’s two largest producers of palladium, the $161.5 million Candaian firm North American Palladium Ltd. (PAL) , and Billings, Montana’s $1.55 billion Stillwater Mining Co. (SWC) have been inching their way up as well. Shares for both companies are up 27 percent and 6 percent over the last week, respectively, despite slightly paring back some gains in the Tuesday trading session.

Hard-asset investors may want to pay attention to both of these precious metals plays, particularly given the precipitous decline of gold and, to a much lesser extent, silver, over the past year. Some big names in the commodities space, including Sprott Global’s Rick Rule, as well as Doug Casey of Casey Research, have stressed on numerous occasions the future viability of both platinum and palladium as great alternative precious metals plays in the near to long-term. North American is a pure Palladium play ever since it divested itself of its increasingly unprofitable gold operations, while Stillwater mines both platinum and palladium. The latter in particular is attractive for its high level of institutional ownership, at over 92 percent.

While gold’s future is uncertain, with wild claims running the spectrum from either its total demise, or its future rebirth and victory, metals like palladium have just as much if not more industrial applications, which should serve well in the event that a global economic upturn, or even just stability, is in the offing.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:




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