The Palladium Rocket Shot

Here’s why palladium has been soaring higher...why it will continue to do so...

...And how you can play it.

Dear Fellow Investor,

Palladium and platinum are known as precious metals. But make no mistake — they aren’t in the same league as gold and silver, at least for now.

But don’t worry about that, because the league they’re in is plenty good enough.

Precious For Industry, Not Money

The platinum group metal (PGM) family is most commonly composed of platinum, palladium and rhodium, among other metals, but none of these are common. In fact, they are much more scarce than both gold and silver.

Of course, scarcity is meaningless without demand.

The good news is that there’s plenty of demand — considerably more than supplies can keep up with — and that’s why the prices of palladium, rhodium and even plain-old platinum have been soaring.

That said, it’s important to recognize the distinction between the PGMs and gold or silver. The latter two metals are valued much more for their monetary uses than their industrial applications.

(Note that many so-called “experts” claim that silver is less risky than gold because its industrial demand can support the price. This is hogwash. Silver is actually more volatile and risky than gold, and if its monetary value somehow disappeared overnight, its industrial demand wouldn’t support a price over $5/ounce.)

But if gold and silver are valued much more for their monetary utility, the PGMs are more greatly valued for their industrial usages in this day and age. There is virtually no monetary demand for the PGMs, at least at this point in the cycle.

So where is the industrial demand for PGMs coming from?

All of the PGMs boast various high-tech uses, but their primary demand comes from the catalytic converters used to clean emissions from internal combustion engines. While all the buzz has been about the growth in electric vehicles (EVs) and the stress that will put on metals like copper and lithium, investors have largely forgotten that internal combustion automobile demand is still growing.

This is why the surge in palladium, in particular, took the entire market by surprise. While no one was looking, palladium has been in a major supply deficit for seven years, and this situation looks to continue at least for the next three years.

But the laws of supply and demand are immutable and unavoidable. And this is why the price of palladium recently soared to nearly $2,600/ounce and rhodium touched $9,600/ounce.

Both metals have cooled off just a bit in recent days, but the supply/demand dynamics are so powerful that prices seem certain to remain elevated for years to come.

So how do you play it?

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The Top Two Gold Newsletter-Recommended PGM Plays

I don’t usually reveal my stock picks in Golden Opportunities; I save these for my paying Gold Newsletter subscribers.

But my subscribers have had plenty of opportunity to buy my top two PGM stocks, yet both are still trading at very attractive levels. So I’m going to let you in on these powerful picks.

• ValOre Metals (VO.V) recently acquired an entire PGM district in Brazil that already boasts a multi-metal (PGM+gold) inferred resource of over a million ounces. A part of the serially-successful Discovery Group of companies, ValOre is poised to dramatically advance its target-rich property position over the next year.

• Generation Mining (GENM.CSE) is developing the massive Marathon Palladium Project in Northern Ontario, which is the largest undeveloped palladium deposit in North America. The company recently announced a preliminary economic assessment that shows remarkable potential profitability, and is now working on releasing a feasibility study over the next few months.

Both of these companies represent powerful levers on the PGMs, boasting not only substantial resources in the ground, but also key catalysts in the weeks ahead. I urge you to do your own due diligence research, but take a look at them now. (Note: I personally own a position in ValOre, but I do not yet own Generation Mining.)

All the best,

Brien Lundin
Editor, Gold Newsletter
CEO, the New Orleans Investment Conference