Palladium is the future of PM, so why are there not many collectors in the UK.

[goldfinger999]

Hello all. some of you may know me from ebay as goldfinger.999 as i weekly sell some of my smaller items. I am new to this forum but am known on the silverstackers forum. 

 

Anyway i have not seen any discussion here on PD. In fact in the UK compared to other countries i have lived in, it appears that not many here are collecting PD which i believe is a shame. Is it because people in the UK are unaware of its importance and rarity or are they just sticking to the most obvious by collecting gold. 

 

I would really like to hear by some people here on the forum about it. Many thanks 

[Keithoil]

Hello Goldfinger999

 

I am aware of it but have just never bought it, as I see gold more easier to sell, it may be the case that you can sell PD, but it is something I have never tried.

 

So for me personally Gold as I know I can sell it, and in lots of places.

[Clens92]

As above, palladium isn't recognised by Average-Joe on the street - if I can't liquidate it quickly, it's basically worthless.  Gold and silver have been currency for millennia; they'll have 'fall-back' value infinitely.

[Shamatti]

I think there are two things holding palladium back.... It isn't well know, and not thought of as a PM. Which means anyone who does look into it is naturally going to worry about fluidity. Plus it is a terrible 'preper' investment.

[Danny-boy]

Palladium is quite high premium isn't it?

[mr-dead]

20% vat in the UK and the only pm to loose value during the recent spike.

[HighlandTiger]

We can buy Gold at 3% over spot, Silver at 23% over spot. Looking at ebay Palladium coins are around 60% over spot.

 

I think those figures show a convincing picture why no-one is bothering with Palladium.

 

 

oh tell a lie, The Bullion Centre have 1oz palladium bars for £660 delivered, that's 32% over spot . With Palladium only 7% off its all time high, the scope for making money is far less than other metals

 

Think I'll stick to good the ol fashioned yella stuff

[SilverPirate]

The worry i have with PD is that after my demise if my stack is divided as i wish and they dispose of it willy nilly they might think its silver and get done.Apart from that it is out of my price range and i see silver and gold more readily disposable. 

[Stu]

Toyed with the idea of getting 1/2 oz of palladium and also 1/2 oz platinum (spot is currently less than gold) in case price goes parabolic however still thinking it through.

[motorbikez]

I think Vat is the biggest issue for UK buyers of palladium and platinum.

[HawkHybrid]

I think spread hence premium is the biggest problem.

vat on a fixed £'s investment is a fixed amount. eg

vat on £1000 will always add £200 whether it's £1K's

worth of silver or palladium. palladium spot will need to

rise a larger percentage in order for you to be able

to sell for what you bought it at.

 

HH

[mr-dead]

Also factor in liquidity, there are a lot more silver/gold buyers out there than palladium.

 

Palladium is more of an industrial metal as stated on silverstackers, a bet on palladium is a bet on the motor industry.

[Pete]

I would have put platinum on the radar ahead of palladium.

You can buy some very nice Pt coins and sets BUT in the UK we have the dreaded full 20% VAT hurdle so not such a great investment perhaps.

[Fluttershy]

I buy Germanium (worth about 4x Silver price per gram), but I have an industruial use for it so I wouldn`t recommend it to anyone else.

having said that, I could get that cash back on ebay quite easily with a small profit even now.

[HighlandTiger]

[Fluttershy]

there`s been a new element discovered by pure accident, called Bo0.

apparently it`s the element of Surprise!

[Danny-boy]

there`s been a new element discovered by pure accident, called Bo0.

apparently it`s the element of Surprise!

[goldfinger999]

Thank you all, it’s been interesting reading some of these comments.

I think I’m going to have to type up some quick notes about Pd and why I think, just as many analysts agree, PD is and will continue to outperform all other metals as it has been.

 

Palladium is a rare PM, even more so than Gold and Platinum and is part of the Platinum family group of metals. We must first realise that Pd has a very high atomic number, a very high melting point and is highly conductive of heat. This is highly reflective in its increasing industrial uses.

 

Not only is it used for Auto catalysts in vehicles, which by the way is now law in China and the USA that all vehicles contain palladium and platinum for cleaner emissions. It won’t be long before the law changes in the EU and in many other parts of the world.

 

Palladium are now in all smart phones, tablets and computers and, all designs on future electronic products are all now having to require palladium. This is mainly because of its high heat resistance. We require smaller devices, that want to do so much more and require so much more power. It requires this high grade quality metal so that these devices we enjoy do not melt in our hands a few weeks later.

 

However the reason for the recent year’s price surge is demand vs supply. The demand is continuing to be strong and increasing, that is a fact which is evident of which I will give some statistical facts later. However the supply is the problem.

 

Only very few countries produce PD.  Russia accounts of more than 41% of global production with South Africa and Zimbabwe at 38% and the final 20% in North America.

In South Africa the mines are controlled by big unions. The country have had strike disruptions over recent years and further strikes which IMO will and can be a continuous hindrance to supply.

 

The world’s largest supplier, Russia, (may not have as much reserves as previously indicated but I reserve that for another discussion), however the biggest fear is further sanctions on Russia by the west in the future could also disrupt supply. If that happens PD will overtake Gold not before long.

Gold which is also a PM and commodity based metal has had its industrial uses used far less now than ever. Apart from jewellery, Gold today acts as an insurance hedge against bad times, market volatility, market crashes etc. And is a good inflation hedge. That’s about it.

 

Buying Palladium of course is limited to people who can access bars and rounds at a reasonable price. In the EU all PM (except Gold) attracts VAT. In Australia all PM’s are VAT FREE (EXCEPT PD!). And of course in the USA, all PM are Sales tax free. When I was in Australia I asked the right people on why only PD was taxed and nothing else. I was told because of continuous demand and short supply the government were taking advantage of making this tax. Now I don’t believe this is the only reason, but I do believe it is, in part.

 

I believe that PD is the best kept industry secret and so it seems so in this country.

 

I can of course understand in the UK that because of the VAT it makes it harder to obtain bars in PD. But this to me is no different to all the silver collectors here is the UK who are paying vat on silver and, it attracts a very high premium compared to gold.

 

I certainly recommend anyone traveling say, to the USA bring some back as opposed to say Silver.

Gold is certainly important to anyone’s PM portfolio as an insurance against the worst of times and inflation hedge.

At this time of the market, I would say buy gold later. Buy silver since at a ratio of 72:1 to gold is a bargain. Sell the silver for gold say at around 45:1 if you really want gold. But PD I say is a must into your portfolio.

With all the above the above I have mentioned on PD here are some latest facts.

 

The gold/palladium ratio fell to a new low of 1.50 as of end 2014, down from 1.7 a year ago and 2.4 at end 2012.

It was only as recent as August 2014 it reached its all-time high at $911/oz with the ratio being at its all-time best against gold at 1.30

I find this amazing. PD’s last all time high was at $875/oz back in August 2011 when gold was at its all-time high at $1900/oz.

Now, if you compare your 5 years charts between Gold and Pd, you will see the trend is completely different. Gold/Silver has been in a downward trend for nearly 4 years whereas PD has an upward trend.  

 

Also with all the recent commodity prices fall in Iron and copper at the lowest in years, PD is the only PM and commodity based metal that is still maintaining a higher trading range.

 

Again, if you are a long term PM collector I would say add some of this stuff when buying on lows to your portfolio. This is a hedge a perfect hedge with your Gold and Silver. 

[Fluttershy]

I have many 10`s of reels of SMD capacitors, that apparently contain Pd in each, these were bought as part of a job lot and are in sizes we don`t use (we go 1206 only).

I have often thought about trying to get the Pd out of them and at the same time make a bit more room in the lab

[Jez]

I like the angle you're proposing.  There is obviously potential in the metal.

 

If you're really serious about Palladium performing well though why don't you just purchase Palladium Futures, CFDs, ETFs or Options?  I'm not familiar with UK tax laws, but surely VAT wouldn't be applicable on paper trades would it?  If this is the case and I lived in the UK it'll make more sense (at least to me) to purchase Palladium on paper and then still purchase gold physically.

 

Considering the large premium attached to it physically in coin or bar form and also considering the lack of demand for it physically in coin or bar form in regards to the coin/bar collecting market (i.e. there is no desirability to collect it specifically for collectors sake, to finish of your coin sets etc) so it's more or less a metal you would naturally only purchase in coin or bar form purely for the rising or falling spot price (and not necessarily for the potential numismatic appreciation that it may hold, at least relative to gold or silver coins).  Also considering it's past historical performance versus the USD (and given the nature of it's supply) it appears to have a greater potential for volatility versus gold or silver, so it seems to make more sense to me that one would naturally reap greater profits riding the volatility of palladium via CFD's (where one has lower premiums upon purchase, much faster / easier resale, much lower resale fees and greater flexibility in regards to going long/short and hedging) than one would by owning it physically in coin or bar form for example.  This is just my opinion obviously, it'll be interesting to hear your take on it.

[HawkHybrid]

goldfinger999,

 

maybe it's just me but I'm reading that you've already

made up your mind about palladium and justifying

your position to yourself and hence others.

 

assuming all that you've noted is free from typos.

ask yourself this: will palladium rise more than

platinum? if so by how much?

 

I'm going to guess that palladium will not rise by

more than platinum as both demands come

primarily from catalytic converter demand.

 

if the above is true then like for like rise in todays

value for palladium should be ~1200/800 or

about a 50% rise. 

by your same numbers it's no better than silvers

72/45 ~60% realistic investment rise.

 

it's not a great return given the extra risk and

only really serve to diversify peoples investments.

 

 

palladium is an industrial metal similar to platinum.

expect demand to go down should economies

perform worst than expected. completely different

from gold(and maybe silver) which does well as a

safe haven. I for one won't be expecting the stock

markets to rise from this point.

 

HH

[garthy]

You make some good points there goldfinger and I would be against picking up a small palladium coin at the right price, but for me gold is still the ultimate PM, because it's rarely used in industry gives it an advantage as it has no counter party risk, I've heard it said and I agree that silvers price would be higher if it was just used as a monetary metal.

So if I was going to put my trust in something that would retain it's purchasing power for years to come it would have to be gold. 

[goldfinger999]

I have many 10`s of reels of SMD capacitors, that apparently contain Pd in each, these were bought as part of a job lot and are in sizes we don`t use (we go 1206 only).

I have often thought about trying to get the Pd out of them and at the same time make a bit more room in the lab

 

Hi fluttershy. yes there are many people who get old of recycled phones and tabs etc and extract the Pd from. There are actually youtube videos that show you how to this 

[goldfinger999]

I like the angle you're proposing.  There is obviously potential in the metal.

If you're really serious about Palladium performing well though why don't you just purchase Palladium Futures, CFDs, ETFs or Options?  I'm not familiar with UK tax laws, but surely VAT wouldn't be applicable on paper trades would it?  If this is the case and I lived in the UK it'll make more sense (at least to me) to purchase Palladium on paper and then still purchase gold physically.

 

 

 

Yes Jez, i think its each to their own on this one. But for me personally, the owning of physical PM's in hand is why i collect. To safeguard my future against anything that may take hold in the future.  The reason i could not go for paper PM's is for the fact that if we were to come to some financial crises, all of the paper stuff could disappear. I for one dont trust them and owning physical is the only secure guaranteed way of security rather than having to rely on some paper system you cannot control. It has long been established that with Gold ETF's , if they were exchanged by all at the same time into physical gold, especially at a time of some crisis, there simply is not enough Gold in the world to cover it. So my reason is more security, and now and then sell, buy and trade at the same time. But i am sure there are many here who have different reasons for collecting and some of them maybe be more inclined to invest in ETF's and options.

[goldfinger999]

I'm going to guess that palladium will not rise by

more than platinum as both demands come

primarily from catalytic converter demand.

 

if the above is true then like for like rise in todays

value for palladium should be ~1200/800 or

about a 50% rise. 

by your same numbers it's no better than silvers

72/45 ~60% realistic investment rise.

 

it's not a great return given the extra risk and

only really serve to diversify peoples investments.

 

 

palladium is an industrial metal similar to platinum.

expect demand to go down should economies

perform worst than expected. completely different

from gold(and maybe silver) which does well as a

safe haven. I for one won't be expecting the stock

markets to rise from this point.

 

HH

 

Yes HH, we can all make predictions, I’m actually going by past and present performance on all the PM front. And I was never talking about leaving one PM for the other. My post was about diversifying ones portfolio if and when opportunities arise. Now I see on this forum there are many types of collectors. Those who deal in coins and all collect for different reasons. I myself am more onto bars rather than rounds and coins although I still buy and trade them and have many in my portfolio. But I am sure that there some collectors here that do collect bars and are happy to buy Au, Ag, PT and given a chance some Pd. People are diversifying around the world, but that does not mean that there are those on this forum that would not.

 

No I cannot make predictions on PT vs PD however, looking at past and continued performance the PD vs PT ratio has also narrowed dramatically. 

 

PD is on the increase in electronic devices and is on the increase, not with Pt. Now are those who have argued why not just put Pt instead of Pd. Unfortunately it’s not as simple as that and one reason as that all future patent designs are planned ahead of at least 10 years, if not more. It all requires Pd. Also if you take a look during all the turmoil we had 5 years ago in the markets, Pd is still in general performing well against all obstacles. Pt all time high was around $2200, it’s now trading less than gold at just below $1265.

 

Plus looking at the mining companies that produce both Pt and Pd in the world, there are less companies than all my fingers and toes. In Russia there is only 1 company and that company controls more than 41% of the world’s Pd supply. All the rest are in South Africa and Zimbabwe with only 2 companies in North America. Now looking at this, compared to amount of mining companies on Gold and Silver in the world, I couldn't begin to work out how many there are.

 

Fact is we are going to need more Pd and Pt in the world and right now, Russia controls the price. It doesn’t matter about if the stock markets do not rise (which by the way is pending on which stock markets we are talking about) since they are. We are still going to need this metal because it is now an everyday use in all devices which we all own. However as I mentioned in my previous post, there are also very potential headwinds for supply considering the limited amount of source material and companies there are and where in the world they are situated. And, what if it came to point where we had to rely only on North America. There is no way they could suddenly fill the 80% that would be needed.  

 

Currently Pt is performing just below Gold at close of yesterday. That indicates to me that in the past weeks Gold has gone to safe haven territory. But this is not going to last. The market has already now priced in the European Central Bank Bond purchasing program on Thursday and is trading just below the $1300 line after having breached that line days earlier and now 1300 seems to have become resistance. It may move higher pending the Greek election results this weekend. But otherwise we have a very strong bull market for the US$, and because of the consistently good data coming from the US, overall stocks are up reaching multi highs and the current safe haven is the US$ and now the Swiss Franc, since they have removed the cap barrier and US Stocks. With this in place I cannot see currently there is much for Gold. One must remember why Gold shot up to $1900 in 2012. Those same reasons are not there at present. 

 

The only plus thing of course for now say for example in the UK, is that the pound £ is much weaker against the US$ and has been in a consistent downtrend since middle of last year. So of course Gold is on the move higher even if the priced US$ is at a standstill or lower. The pound by some analysts predict the pound may go down as low as $1.45.

 

However despite all this we can never be sure however what’s around the corner. So I collect all PM's and Gold and silver is a main part of my portfolio and includes Pt and Pd. But hey, that’s the reason I do this right.   

 

The title of my thread ' Palladium is the future of PM, so why are there not many collectors in the UK’. After reading some of the replies I could see some were not aware of it as many are main collectors are overseas. So I gave my take on it as I know many that do collect abroad. But when I joined this forum there was no mention of Pd at all, hence the title of my thread. I can see there are many coin collectors here and fewer bar collectors. None of my posts are posted to deter people away from Gold and silver, as that would be stupid as I myself still trade those for the reasons I have given in previous posts. But it does no harm for some people to look into other PM's and if an opportunity arises for people to invest, such as buy on the lows, or maybe pick some up while travelling in a country with no VAT etc. 

 

I may actually offer some 5 gram strips of Pd in the coming weeks on the trade forum and do it cheaper so it can give those who may be interested ahead start even if they only want a tiny bit. I’d probably ask to buy them back later.