What is palladium?
Palladium is a very rare grey-white precious metal that is resistant to corrosion and it is part of the platinum-group metals. It can be found in deposits together with other metals such as platinum, gold, silver, copper and nickel. However, it is extracted as a secondary product during the mining operations of the other metals and the precious metal is extracted mainly in Russia and Africa.
Palladium is primarily used in the production of catalytic converters for vehicles because of its properties to transform and purify exhaust gasses. What is interesting about this metal is that an adequate and equally efficient substitute cannot be found for these exhaust systems.
Palladium also has other applications in a vast number of industries and it is used in dental products, in electronic contacts, surgical instruments, parts for watches and so on. The material which is obtained when palladium is combined (alloyed) with gold is called white gold. The palladium spot price is quoted on different commodity-related exchanges such as the London Metal Exchange (LME).
Palladium price movements in the last decade
A limit in the metal’s supply in recent years has increased its spot price. While supply struggles demand has surged, as governments around the world, especially in China, pass more and more regulations aiming to reduce emissions.
Going through the ten-year price chart of palladium we can see that there is a decade long constant upward trend and the palladium reached its peak in the second half of February 2020 when it had a price of more than $2,600 (£2,083). The upward movement can be better understanding if you consider that the palladium price in January 2010 was around $320 (£256) showing that the price has increased more than seven times.
However, the palladium price fell drastic during the first quarter of 2020 due to the coronavirus outbreak. The pandemic had a negative influence on the global economy and consequently on the demand for palladium. The metal has since rebounded as lockdowns in Russia and South Africa have severely affected supply.
How to invest in palladium?
You can invest in palladium using different types of instruments or even buy bullion. You can purchase palladium bars from a dealer, but this means that you will acquire the metal at a premium as much as a few percentages above its spot price. Hence, your investment value will be lower at the moment when you buy the bars because the spot price is lower than the price you have paid.
Trading futures, forwards or options is also a valid method with which you can profit from palladium price movements. Still, this type of trading requires more knowledge compared to only buying or selling the commodity. For trading derivative instruments traders need to understand the notion behind the instruments before opening positions. So, although they can be profitable, they can be complex methods for palladium trading.
Of course, you can always invest in palladium by purchasing shares or units from different types of funds, such as mutual funds or Exchange-traded funds (ETFs). Still, before investing in these funds, you need to do a fair amount of research to choose the most adequate and credible fund. Moreover, you need to pay attention to aspects such as fees as they negatively affect your profits.
To answer the needs of the traders and overcome the obstacles imposed by other trading instruments, Currency.com has resorted toward blockchain technology. Using this technology, Currency.com created tokens linked to real-world assets. When you invest in tokenised assets or commodities, you can make gains with the price changes of that commodity without the need to own it.
By offering the possibility for palladium trading with tokenised commodities, Currency.com resolves the issues for traders with an insufficient level of funds. By providing leverage of 1:100 on its tokenised assets, Currency.com enables traders to open bigger positions even with a small amount of capital. You can buy tokenised palladium with a margin as low as 1 per cent. Thus, for a position of $15,000 (£12,021) you need to have $150 (£120) of free capital.
Currency.com trading platform has also paid attention to the problems of traders holding cryptocurrencies. Namely, while you would normally need to exchange your Bitcoin or Ethereum before you open a position, this is not the case when you trade on Currency.com. You are now able to buy tokenised commodities directly with crypto or fiat money with which the crypto to cash conversion costs is eliminated.
Tokenised palladium trading guide
As tokenised palladium is rather easy to understand also the process of trading this instrument is followed with a couple of basic steps, which are:
- Step 1: You can create your profile and account on Currency.com trading platform when you go through the two-factor authentication security.
- Step 2: It is up to you to decide whether you will be trading palladium with crypto or fiat and accordingly fund your account.
- Step 3: Choose the value of the preferred position and calculate how much capital you will need with the 1 per cent margin offered by Currency.com.
- Step 4: Traders can speculate an increase in palladium price and accordingly buy tokenised palladium or they could speculate on the decline in value by opening a short position.
- Step 5: The fulfilment of the orders is executed by Currency.com when it matches buy with sell orders coming from its clients and the orders which remain unmatched are hedged with Capital.com, LMAX Digital or Binance, Bitstamp, Kraken, NASDAQ, NYSE and Gain Capital.
- Step 6: Palladium trading on Currency.com is also easier when it comes to closing your positions. You have the options to use a stop loss and take profit orders or you can close the position by yourself and collect the profits.
Why trade tokenised palladium with Currency.com
Palladium trading at Currency.com tokenised securities exchange has a number of advantages. Tokenised securities are underpinned by robust and immutable blockchain technology. Opening a trade will give you a token that tracks and moves according to the underlying instrument's price.
- One-stop crypto trading platform
Trade tokenised palladium with Bitcoin or Ethereum. Benefit from the commodity's price movements without turning your crypto assets into fiat.
Trade tokenised palladium with a tight market spread, benefit from maker rebates and competitive taker fees.
Experienced traders can trade the world's top markets, like palladium, with up to 1:100 leverage.
- Effective risk management
Manage your risks and secure your profits with stop loss and take profit orders. Save your assets with negative balance protection.
We have a scalable and low latency order management system, which can execute 50 million trades per second.
Currency.com operates under new Belarusian regulation with best-in-class AML and KYC laws. Regulatory details and fees are upfront.