When it comes to precious metals investment, palladium is often overlooked in favour of the better-known precious metals like gold and silver. However, palladium is far more rare than gold. This makes it an excellent precious metal to add to a self-directed IRA and it can add diversity to your investment portfolio. Over the last decade it has gained an impressive track record and many experts are expecting this trend to continue.
Palladium is one of a group of elements belonging to the Platinum Group Metals (PGM’s). These metals derive much of their value from industrial uses. For example, more than half of the supply of palladium goes into catalytic converters for automobiles, and it is widely used in electronic components, dentistry, medical instruments, watch making, fuel cells, aircraft spark plugs, and jewellery.
As a result of the Taxpayer Relief Act of 1997, the IRS permitted palladium coins and bars of at least 0.9995 purity to be held in an IRA account. The metal must be certified by a certified assayer or refiner (such as NYMEX and COMEX) to ensure the minimum pureness of 0.9995% that is required for IRA eligibility. The Canadian Maple Leaf and the US Platinum Eagle are two of the most popular coins that meet the fineness standards for what is accepted in a self-directed IRA.
As a means to preserve the value of one’s money, palladium can provide a viable and affordable alternative to investing in gold. It is more scarce than gold and its value is expected to rise due to increased industrial demand.
The automobile industry’s need for catalytic converters is one of the key drivers in the demand for members of the platinum family, and with the US and China now producing more vehicles than ever, prices are set to increase in the years to come. The CRB Commodity Yearbook has reported “Platinum is one of the world’s rarest metals with new mine production totalling only about 5 million troy ounces a year. All the platinum mined to date would fit in the average sized living room.”
Many investment specialists are recognizing the fact that palladium is becoming increasingly popular as an investment option in IRA accounts. As with other precious metals like gold and silver, it provides a secure hedge investment that is shielded from the volatility of the dollar and stock market. Historical charts, as well as many experts, are suggesting its value will continue to increase over time. And because palladium is cheaper to purchase than gold, it can provide an easy and affordable way to get into precious metals investment.
There are several ways to invest in palladium, as well as purchasing physical coins and bars. For example, you can invest through exchange-traded funds (ETF’s) or through stocks in mining companies. But please remember, whichever investment method you choose, it is important that you do your own research, as well as seek advice from an investment specialist.