Question 1

What is the Ratio of Platinum to Palladium?

Accepted Answer

The palladium vs platinum price chart represents a mathematical comparison between the two platinum group metals. This tool is often used to understand if one metal is a better buy in comparison to the other. For instance, if platinum is worth about $1,200 and the palladium price is $2,400, it would have a ratio equal to 2:1, or just 2. This even further simplifies to say that 2 troy oz of platinum equals 1 oz of platinum. Someone who has that amount in platinum might decide to sell it and then buy palladium, or vice versa.

The platinum to palladium ratio is displayed in troy ounces with Bullion Exchanges. However, you might also find that the ratio can be measured in grams, kilograms, tonnes, and more.

Question 2

Why does the Platinum Palladium Price Ratio Matter?

Accepted Answer

Both platinum and palladium are platinum group metals and often trade in similar ways to each other. However, you can use this ratio to determine if one is overbought in comparison to another. As a result, you can decide if you want to buy or sell one metal over another at any given time. If the ratio is high, then it may mean that palladium is oversold with very high demand. So, you might consider selling your palladium or buying platinum, which is undervalued in comparison. On the other hand, if the ratio is low, then palladium could be the better choice to buy at that time in comparison to platinum.

Using the platinum vs palladium ratio chart can help you make an educated decision to enter, exit, or hold your current investments in the market. Having a diversified safe haven portfolio maximizes your hedge since not all metals trade with the same factors weighing on them. For instance, gold is heavily used as an investment vehicle, but palladium is more impacted by the automobile industry.

Question 3

Where do Platinum and Palladium Come From?

Accepted Answer

More than 70% of the yearly platinum supply is exported by South Africa, a country with major geopolitical risks. Other producers include Russia at 10-12%, Zimbabwe at 5%, and Canada at 4%. The US produces less than 2% per year.

The palladium supply is more evenly distributed across Russia and South Africa, making it slightly less subject to single country risk. Russia and South Africa each manufacture about 38-39% of world demand. In 2020, Russian and South African mining made up 43% and 33%, respectively. Canada produced 9.5%, the United States around 7%, and Zimbabwe came in around 6%.

Question 4

Platinum vs Palladium Price Volatility

Accepted Answer

If you are a seasoned investor, you may have noticed that platinum group metals can be volatile and expensive. Indeed, both metals can massively and suddenly spike or plummet. Sometimes platinum and palladium prices can strongly diverge. This is because of a few reasons, one of which is that platinum and palladium are both small markets. Platinum primarily comes from South Africa, whereas palladium sees exports from both Russia and South Africa with similar volumes. Therefore, geopolitical events can easily affect the platinum and palladium prices if it affects the supply.

Cumulatively, these two markets have been nearly congruent in size for over 25 years, according to current data. Because of this, platinum and palladium should technically trade at about the same price. But they clearly do not. This is because supply and demand make the PGM markets incredibly volatile, especially as industrially favored instruments. Because palladium is usually only produced as a byproduct of platinum and/or nickel mining, it is much rarer. Due to supply constraints, palladium is often more expensive than platinum, though this was not always the case!

Learn more about the fundamental factors for both platinum and palladium for free in our Learning Center.

Question 5

What Affects the Price of Platinum Group Metals?

Accepted Answer

Platinum and palladium prices are extremely subject to industrial demand, so if industrial demand slows, these prices may fall. For example, if a company starts to decrease the production of cars then the prices of these metals may noticeably plummet. This is because both metals are used in automobiles’ catalytic converters.

Fluctuations in the relative prices of platinum and palladium are largely driven by the health and growth of the world’s economy. This is especially the case in demand for gasoline and diesel combustion engines. On top of that, geopolitical issues in South Africa can wreak havoc on the platinum supply.

Platinum is also a jeweler and investor favorite because of its high density. Its applications vary industrially. Minor uses comprise about 60% of its demand each year. Specifically, about 30% is used in jewelry, but 10% is for investment demand. But, times of economic turmoil often make platinum behave like gold from widespread hoarding.

On the other hand, palladium’s industrial demand is much higher, making up around 94% of the total. The automobile market, for the most part, dominates the palladium market. Other significant demand comes from the electronic, dentistry, and chemical industries. A slim 5% constitutes jewelry demand, and there is usually rather small investment demand.

Question 6

History of the Palladium Platinum Price Ratio Chart

Accepted Answer

The average ratio of the palladium platinum price ratio from 1991-2021 was 2.51, with a high over 5.30 to below 0.50. In the 90s, the ratio was on the decline, reaching a historic low in 2001. This low was spurred by rumors that Russia was going to restrict and stop selling palladium entirely. This inspired frantic demand for palladium by automobile manufacturers. Although platinum was widely used before palladium for the purpose of catalytic converters, a change in fuel production reduced its effectiveness. Therefore, palladium became more efficient at reducing emissions, but it was cheaper before these rumors sparked intense trading. Afterwards, Russia dumped palladium on the market, plunging the price and increasing the ratio.

Times of war and turmoil in the oil industry heavily impacted platinum and palladium prices. When platinum was more expensive, palladium was used as a substitute. Today, palladium is more expensive than platinum, but this can change at any time if one proves to be more efficient than the other.

Question 7

Platinum vs Palladium Price: When to Buy

Accepted Answer

The platinum-palladium ratio can ascertain whether one metal is over or undervalued with respect to the other. A monthly ratio below 0.89 is quite rare. In fact, ratios less than 1.0 rarely occur. This occurred in late 2000 to mid-2001 after the rumors that Russia was not going to continue exporting palladium. This made anxious investors start buying palladium in a frenzy, only for the market to suddenly be flooded with palladium. They price of palladium came crashing down after.

Therefore, a lower ratio might indicate a good time to diversify into palladium bullion. This metal is very rare and could be the centerpiece of your collection. However, a higher ratio might mean that you might find a better deal on platinum bullion at that time. This ratio has a history of gradual, but extreme, swings. Understanding the ratio can help you discover buying and selling opportunities when platinum is high or palladium is high.

Paying attention to the spot prices alone might not show you the whole picture of the bullion market. For this reason, you might want to also utilize our platinum vs palladium ratio chart.

If you have any questions or concerns, please do not hesitate to contact us. Our customer service team is available Monday through Friday from 9 AM to 5 PM EST, excluding holidays.

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