Thursday, April 15, 2010

ETFS Physical Palladium (PALL) a Superstar Since Inception

In January, the first physical ETFs for both Palladium (PALL) and Platinum (PPLT) were introduced.   Both ETFS have proven popular with investors, with the ETFS Physical Palladium ETF garnering in excess of $250M in assets and the ETFS Physical Platinum ETF over $500M.  Performance has also been very good, but frankly all asset classes are moving en masse so it is hard to really tell what is gaining for individual story reasons, and what is gaining from 'rising tides lift all boat' reasons.   That said, the performance in Palladium - especially of late (up nearly 25% in less than a month), has been quite awe inspiring.

While platinum is similar to silver in that it has industrial use as well as a potential 'store of value', palladium is a pure industrial play similar to copper.  (both palladium and platinum uses heavily in the auto industry)  Since there is not a "Copper ETF", it appears the new palladium ETF would be a convenient way to benefit from the wave of economic optimism, without company specific risk (such as buying Freeport McMoran & Gold (FCX)).

Yesterday's positive earnings report helped moved palladium to a 2 year high.
  • Palladium prices surged with a Commerce Department reports that showed retail spending rose sharply in March, in part because incentives fueled a 6.7 percent increase in auto sales.  Palladium and platinum are used in making catalytic converters for cars. 
  • Palladium for June delivery hit levels not seen since March 2008, settling at $548 an ounce, up $26.20.

Web page for PALL here.
Web page for PPLT here.


As an aside, before this ETF the one (of two) ways traders were able to get exposure to palladium was investing in North American Palladium (PAL) - which lo and behold is breaking out today.  (the other option for both palladium and platinum is Stillwater Mining Company [SWC])

North American Palladium Ltd. engages in exploring and mining platinum group metals, gold, and other base metals in Canada. The company explores primarily for palladium, platinum, gold, silver, nickel, and copper metals. The company’s principal properties include the Lac des Iles palladium mine consisting of an open pit mine, an underground mine, and processing facilities located in the Thunder Bay District, Ontario; and Sleeping Giant gold mine located in the Abitibi region in Quebec, Canada.

No position but mulling PAL

Disclaimer: The opinions listed on this blog are for educational purpose only. You should do your own research before making any decisions.
This blog, its affiliates, partners or authors are not responsible or liable for any misstatements and/or losses you might sustain from the content provided.

Copyright @2012