Disadvantages of Palladium Investment

Disadvantages of investing in Palladium
Despite many advantages palladium investment has also its disadvantages especially in compare to investments in gold. If safety and reliability are one of palladium's greatest advantages they are at the same time also its disadvantages. Palladium has a short history in the financial sector and has not proved itself during crisis in contrary to silver and gold which are historically proved among the most desired things during the crisis.

Besides its short tradition in the financial sector and uncertainty of its value during eventual crisis one of disadvantages of palladium investment is also unpredictability of the future trend of its prices. The fact that about half of palladium world's production is being used in automotive industry for making catalytic converters might have negative impact on its future prices especially at this moment when the crisis of the financial sector is not yet under control and will probably have also great impact on global economy. Lesser stability of palladium in compare to gold became obvious after July 2008 when the prices of palladium began to fall, while gold retained its value. If the price of one ounce of palladium was about 2:1 in compare to one ounce of gold from 2003 to July 2008 prize ratio between palladium and gold was 4:1 in October 2008. Such ratio might present unique opportunity for profit but might also represent change of prize ratio between palladium and gold in the future.

One of disadvantages of palladium in compare with gold is also the fact that palladium is in contrary to gold a subject of taxation which is about 20% varying few percent up or down from country to country.


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