Important Considerations for Palladium Investing In 2013

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In recent history, all of the market watchers for investing in precious metals have been watching the prices for gold, silver, platinum and palladium with growing interest. The prices have been skyrocketing with seemingly no end in sight. More and more people jumped on the bandwagon, but it seems as if the gravy train may be over, at least for a little while. This has many wondering if palladium investing in 2013 is even a good idea. Here are some things to consider.

Drop in Foreign Demand for Palladium

One of the things to remember is that palladium has always been in high demand in the European nations. Some of the nations the watchers are watching are South Africa and Russia, as well as Europe. This is because these are the top two producers of palladium in the world. They have been squeezing supply for some time. Those thinking about the possibility of palladium investing in 2013 have been tormented by the supply of palladium dropping. While this is normally a good thing, consider for a second the fact that the prices for the metal have been dropping as well.

The main reason for this is that while the U.S. and China have started to increase their demand for automobiles, the major use for palladium, Europe has dropped its demand for palladium in use for building new catalytic converters. Part of the reason why palladium investing in 2013 is taking such a roller coaster ride is because Europe does not need as much new palladium. Instead, European nations are recycling the palladium already in the cars on the road.

Europe has always been a little more forward thinking about the environment. This means that the old cars are being pulled from the streets, even while owners are still enjoying driving them. The old cars are sold and resold on the market, eliminating the need to create new engines, thus depleting the demand for palladium in building newer cars.

It is expected that the need for raw materials will pick up again, but the stockpiles created in Russia can maintain the demand for quite a while thanks to an overloaded supply. Even if the South African mines are able to resolve labor issues and get back on line, it is not likely they will be in demand until 2015.

Where is Palladium Going?

The interesting in palladium investing in 2013 is waning mostly because of the fact that the majority of the investors are simply getting out of the precious metals investment game altogether. These investors are looking at the decreasing demand and the lowering prices on all metals and all of a sudden, the markets are looking pretty good to the hungry investor.

Having said that, the prices for palladium are starting to recover from the point they were at just a few months ago. The April 2013 prices were all the way down to $650 and are now up to $730. While this is still not as interesting as prices well over $1,000, it is a sign of improvement and a reason to get involved in palladium investing in 2013.

The prices are expected to keep going up on palladium. The average price is expected to remain around $850 for those who are involved in palladium investing in 2013. However, when 2014 rolls around, it is more likely that the prices will take a major jump to hover between $800 and $1,000. Those familiar with the precious metals investing game understand that the top end is always just a little further down the road. This means that an investment now will be an investment into lower priced metal investments.

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