The Forecast for Palladium in 2022 & Why You Should Be Investing In Palladium
Are Palladium Coins A Good Investment?
Every year, we have customers asking, “are palladium coins a good investment?” While we would love to say that the answer is always yes, it largely depends on the market, which can change from month to month and quarter to quarter. For that reason, we always like to start a new year by looking at palladium market news.
This year is no different!
Join us as we look through the various factors that impact palladium prices. We will examine them individually and see how they work together to raise or lower the market price. We will use all of this information to create our Palladium Forecast 2022.
Factors Impacting Palladium Prices
High demand and low supply are two of the biggest influences on the price of any item. This is especially true for precious metals. Over the past few years, palladium prices rose well above gold prices due to a recent increase in demand for a relatively scarce resource.
What factors affect the supply and demand for palladium?
- Vehicle Manufacturing
- Palladium Mining
- Supply Chains
With covid diminishing the semiconductor industry, the automotive industry has taken its own hit in production. In fact, the lack of chips caused the global auto industry to cut output by as much as 13 percent in 2021.
What does this have to do with palladium?
More than 85% of the world’s palladium goes to the automotive industry to create catalytic converters. It is a critical element of reducing a vehicle’s harmful emissions. Since the world has started focusing on the environment’s health, the demand for palladium has grown even more.
Unfortunately, the decrease in automotive production meant less demand for palladium in 2021. The good news is that the chip shortage situation is expected to improve this year. While we don’t anticipate a complete recovery, we believe that the demand for palladium will increase as automotive productions ramps back up.
Palladium Mine Supplies
Our Palladium Price Forecast 2022 also shows significant changes in the supply—the other half of the key equation. Palladium prices have always been susceptible to mine production, and the past couple of years have been no exception.
While palladium demand decreased in 2020 and 2021, the palladium producers saw their deficits nearly cut in half. For example, Nornickel is one of the world’s largest palladium producers, and their deficits dropped from an estimate of 400,000-500,000 ounces to just 200,000-300,000 ounces.
As a result, some palladium news experts expect palladium to see its first surplus in the last ten years. However, they are optimistic that an increase in investor demand can help reduce the surplus.
The recent decrease in the deficit came as a surprise after Nornickel experienced sudden flooding at two of their mines. The two sites accounted for approximately 36% of all the ore mined by their company in Russia. This decrease in production briefly reduced the supply of palladium, but both mines were able to recover fairly quickly and are now in full operation again.
The Supply Chain
Supply chains all over the globe have been largely impacted by covid-19. While it hasn’t been one of the biggest factors to influence the price of palladium, it is certainly something worth keeping in mind as you ask, “is palladium worth investing in?”
If some manufacturers cannot get their usual supply of palladium, they may start to look for other alternatives, such as platinum. Therefore, a supply chain issue could trigger a long-term change in demand, as some industries may decide not to go back to palladium in the future.
Palladium Market News: The Palladium Price Forecast In 2022
After learning more about the different factors and events that can impact palladium, it’s essential to look at what that means for you. Why invest in palladium? More specifically, why should you invest your hard-earned money in a precious metal that has seen a decrease in demand and an increase in supply? We still think it’s an excellent choice for investors looking to get in while prices are low and expected to grow.
Prices Are Still Low
While the current numbers might look bad for someone who purchased palladium when it was at its highest, they are quite attractive to someone who has yet to invest. As with most investments, it’s great to get in while the prices are low, and you can afford to buy more of the metal. Investing in a precious metal when it is facing a price dip is a great way to ensure that you get a higher return when it returns to a bear market.
Growth is Expected at the End of the Year
If you aren’t interested in playing the long game, you may be more concerned about the market’s anticipated changes throughout 2022. In this case, things look optimistic. At the start of 2022, palladium prices fell between 1,850 and $1,900. However, small increases in automotive production are expected to increase the price. Experts are estimated that palladium will have a quarterly average of $2,300 by the end of this year.
Investors in it for the long haul will be happy to know that the long-term predictions are also optimistic. Experts anticipate prices to rise to about $2,500 in one year and $3,500-4,000 in four years.
Is It A Good Time To Buy Palladium?
So, is it a good time to buy palladium? We believe so. The market factors indicate that 2022 would be a great time for precious metal investors to get in on the palladium market.
If you are new to coin and precious metal investments, you don’t have to worry about entering the market blindly. At International Precious Metals, we have several helpful representatives ready to help you make your investment.
You can get in contact with our palladium experts by calling our office, or you can submit your contact information through our simple online form. We even have a live chat feature on our website so that you can speak with a live agent at your convenience.
For more palladium news and other great reports on the industry, check out other great articles at IPM, including How Much Is A Gold American Eagle Coin Worth, Investing In US Mint Coins, & The Most Valuable Coins In Circulation.