Investors looking for equity plays on rising palladium prices can consider the iShares MSCI South Africa ETF (NYSEArca: EZA). South Africa produces 36% of the world’s palladium, second-most behind Russia. In the past month has PALL has risen, EZA has climbed 6.1%.
The risk with opting for EZA as a palladium play is two-fold. First, South Africa is also a major gold producer and EZA can, at times, take its cues from price action in gold. Second, South Africa has been home to numerous instances of labor unrest at its precious metals mines over the past few years. Those mining strikes often lead to short-term increases in palladium prices because traders perceive supply as being threatened, but not being able to bring supply to market weighs on the mining stocks found in EZA.
ETFS Physical Palladium Shares
ETF Trends editorial team contributed to this article.