The most valuable metal
Palladium is now the most valuable of the four major precious metals, with an acute shortage driving prices to a record. A key component in pollution-control devices for cars and trucks, the metal’s price doubled in little more than a year, making it more expensive than gold.

What is palladium?
It’s a lustrous white material, one of the six platinum-group metals. About 85% of palladium ends up in the exhaust systems in cars, where it helps turn toxic pollutants into less-harmful carbon dioxide and water vapour. It is also used in electronics, dentistry and jewellery.

Are speculators driving up the price?
Partly. Since August 2018, hedge funds have increased bets that prices will rise. Yet what is palladium for immediate delivery trades at a premium to material for delivery later, suggesting manufacturers are scrambling for supply. And palladium-backed exchange-traded funds saw net-outflows this year as investors withdrew metal, then leased it to users at lucrative rates.

Is palladium usually this volatile?
Yes, and not just palladium. Precious metals used in small quantities by the auto industry have a history of price spikes when demand outstrips supply. In the decade following 1998, platinum soared more than 500% as a shortage caught the attention of speculative buyers. Rhodium rallied more than 4,000% over a similar period before carmakers found ways to use less. What is palladium jumped nine-fold from its lows in 1996 to a peak in 2001.

Why is supply so tight?
Palladium’s status as a byproduct to platinum or nickel mining means output tends to lag price gains. In fact, the amount produced is projected to fall short of demand for an eighth straight year in 2019. That’s helped drive prices to successive records.