Palladium: Now The World’s Most Expensive Precious Metal?

Given that it has already surpassed gold’s record high back in mid-December 2019, is palladium now the most valuable of the four exchange-traded precious metals?

By: Ringo Bones

Palladium has already surpassed gold’s record high back in mid-December 2019. This latest rise - it has jumped by more than 25-percent in the last two weeks alone, and almost doubled its value over the last year - now makes palladium the most valuable of the four exchange-traded precious metals compared to gold, silver and platinum. At about 2,500 US dollars per troy ounce, palladium is now more expensive than gold – gold is currently hovering at around the 1,500 US dollar per troy ounce mark – and the pressures forcing its price rise are unlikely to ease anytime soon.

For the eight year now, the amount of palladium produced is way below global demand and the shortfall looks set to continue as South Africa, which currently produces around 40-percent of the world’s supply said last week that its output of the platinum group of metals – in which palladium belongs – fell by 13-percent in November 2019 compared to a year earlier. But what makes palladium indispensable to the modern world?

Palladium was discovered back in 1803 by the British chemist William Hyde Wollaston. Due to its corrosion resistance, palladium was first used in dental crowns inlays and bridgework, jewelry work and watch mechanisms. When the telephone system expanded around the world, it was used for contacts in telephone relays and to maintain reliable conductivity of electrical connectors.

For much of the 20^th Century, the largest use of palladium is in jewelry. The chemical industry is the second largest user in the production of catalysts for the manufacture of sulfuric acid, ammonia and hydrogenated oils. During the clean air act of the 1970s, the platinum group of metals – which includes palladium – finds widespread use as active components of automobile catalytic converters to reduce pollution.

A special use for palladium is palladium chloride in the detection of very small amounts of the poisonous carbon monoxide gas. It takes as little as one part of palladium in 10,000 parts of solution causing it to darken when exposed to carbon monoxide gas whose concentrations are as little as one part of carbon monoxide per 10,000 parts of air. The carbon monoxide reduces the palladium chloride solution to its elemental state, accounting for the darkening of the solution.

The platinum group of metals – which includes palladium – is very scarce and not concentrated in any special geographic location. Areas that yield cobalt, copper, and nickel are also likely to yield palladium. During the Cold War, the Ural Mountains of the Soviet Union have reasonably abundant supply of palladium and its related metals. The then Soviet Union was one of the first nations that got very active in developing the chemistry of the platinum group of metals and the industrial extraction of palladium.

The separation of one metal from another is a most difficult and tedious chemical operation. One of the metals – osmium – is rather easily removed since it forms a volatile tetraoxide. Platinum and palladium may be separated by taking advantage of their greater tendency to form a soluble chloride complex with aqua regia than do the elements ruthenium, rhodium and iridium.