What is Palladium?

Palladium is a chemical element with symbol Pd and atomic number 46. It is a rare and lustrous silvery-white metal William Wollaston discovered Palladium in 1803.

Palladium, platinum, rhodium, ruthenium, iridium and osmium, form a group of elements referred to as the platinum group metals (PGMs). These have similar chemical properties, but palladium has the lowest melting point and is the least dense of them.

Palladium is also used in electronics, dentistry, medicine, hydrogen purification, chemical applications, groundwater treatment and jewellery. Palladium plays a key role in the technology used for fuel cells, which combine hydrogen and oxygen to produce electricity, heat and water.

Uses of Palladium

Palladium is commonly used in catalytic converters for cars. Palladium is also used as a catalyst in hydrogenation and dehydrogenation reactions. Hydrogen diffuses via heated palladium, this is a form of separating and refining the gas.

Palladium is also found in:

  • Jewellery
  • Dental fillings and crowns
  • Ceramic capacitors in laptops and mobile phones

Risks of Palladium

Like any futures contract, there is always the possibility that the underlying asset i.e. palladium will move in the opposite direction to which you hold your contract. For example: you have taken a long position (expecting the price of palladium to rise), if this were to happen and the palladium fell in price, your long position in palladium will decrease in value.

With any commodity, supply and demand will affect the price dramatically if there is a change, this risk is one that should be monitored on a regular basis and adjusted to suit your risk parameters.

Mining of metals has an inherent risk with the level of costs associated with extracting the product from the earth. This can include, but not limited to: the cost of oil to fuel machinery, cost of labour or new tax regulations being implemented.




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