What it is:
Palladium is a metal used in manufacturing electronics and other items.
How it works (Example):
Palladium is a rare metal that is silvery white. It is part of the platinum group.
Because of its high melting point and corrosion, palladium is used in a variety of products, though it is most common in the manufacture of catalytic converters and electronics that help make microchips. Accordingly, it is necessary for the production of computers, cell phones and other electronics and transportation devices. Dentists and jewelers also use the element. It can be more durable than gold plating.
Why it Matters:
Investors can invest in palladium via futures and options, as well as in physical bullion, bars, wafers and coins. Because it is a commodity in the world, investors should be very careful about managing the associated high risk.,
Often, palladium investors are very mindful of changes in emissions standards. Because palladium acts as afor oxidation in catalytic converters, demand for the metal increases when emissions standards increase.