We have spent some time addressing recent weakness in precious metals and related ETFs such as GLD (SPDR Gold Trust, Expense Ratio 0.40%) and SLV (iShares Silver Trust, Expense Ratio 0.50%) and one precious metal that has been holding its own even in spite of today’s more than 1% drop, is Palladium, and linked ETF PALL (ETFS Physical Palladium ETF, Expense Ratio 0.60%).
While Gold and Silver toil near early June lows, PALL just registered a new high since inception (January of 2010) just seven trading sessions ago. Despite the uptrend throughout most of 2014 in Palladium, PALL has
seen more than $72 million leave the fund via redemptions and leaving the fund with an asset base of about $547 million.
Only averaging about 51,000 shares traded daily, PALL has mostly been used as an asset allocation vehicle and more of a “buy and hold” as opposed to a short term trading product it seems. Not only very rare, the metal Palladium has several uses that appear intact even with other precious metals weakening as of late, including being instrumental in catalytic converters on automobiles.
Other uses for Palladium in the real world are in the electronics industry, specifically where Palladium alloy can be effective as an electrode in devices, as well as to a lesser degree in the Jewelry industry.
Here, Palladium can serve as a “substitute” to platinum in the manufacture of what is known as “white gold.” On that note, there is an interesting but not exactly well-known product on the marketplace from the same issuer as PALL, known as WITE (ETFS Physical White Metal Basket ETF, Expense Ratio 0.60%) which is a physically backed way to have exposure to the “white metals,” Silver (>48.7%), Platinum (>34.6%) and Palladium (>16.5%).