Palladium: Is It a Better Investment Than Gold?

Gold and palladium are two precious metals that may be used to diversify investment portfolios. Investors may purchase them as a hedge against inflation or to create a financial safe haven for their wealth.

Gold may be the better option for those who want an investment with a long, proven history of maintaining its value. However, investors with less capital may consider investing in palladium, because it’s a more affordable option. Here’s a closer look at palladium, how it compares to gold, and when it may be a wise investment for your portfolio.

Table of Contents

1. What is palladium?
2. Palladium vs. gold overview
3. Market dynamics and price trends
4. What is palladium used for?
5. How to invest in palladium
6. Pros and cons of investing in palladium
7. Should I invest in palladium vs. gold?

What is palladium?

Unlike gold, palladium is a relatively new discovery. It was first found in platinum ore in 1803, according to Chemical & Engineering News, a publication of the American Chemical Society. Its name comes from the asteroid Pallas.

Palladium is a soft silver-white metal that does not corrode and is valued for its industrial uses. It is a vital component of automobile catalytic converters and may also be used in electronics, jewelry, and some dental work.

Closely related to platinum, palladium is one of six elements that make up the platinum group metals. While platinum and palladium have similar industrial uses, platinum is denser and has a higher melting point, making it a better choice for some applications.

Palladium vs. gold overview

While platinum and palladium are similar metals, gold and palladium differ significantly. They have unique histories, uses,, and properties, which is why investors value them differently. 

Gold

The history of gold dates to 4000 BC, according to the National Mining Association. It was initially used to create decorative items and jewelry, but by 1500 BC, it became valued as a store of wealth and used for trade. In modern times, the supply of U.S. currency was linked to gold until as recently as 1971.

Today, private investors value gold as a hedge against inflation since the metal has historically held its value when currency weakens. As a commodity that has traditionally seen consistent demand, gold is also used as a safe haven to maintain wealth during economic and political instability.

Investors aren’t the only ones who want gold though. It is also used for jewelry, electronics, and dental work. However, there is only so much gold to go around. All the gold mined in history would fit in a square box with sides 20 meters long, according to BBC Science Focus.

That rarity helps keep gold prices elevated. The precious metal saw record highs in 2024, and many industry experts believe prices will continue to climb in 2025.

Palladium

Compared to gold, palladium is the new kid on the block. It was discovered by chemist William Hyde Wollaston in 1803 when he analyzed samples of platinum from South Africa.

Palladium is rarely mined by itself and is normally created as a byproduct of mining another metal such as platinum, nickel, copper, silver, or gold, according to the Jefferson Lab research facility. As a result, palladium is exceedingly rare—30 times rarer than gold, precious metals dealer Apmex says.

More than 60% of the world’s platinum and palladium are used in the automotive industry to create catalytic converters and certain fuel cells. However, the price for palladium can be volatile, particularly since most of it is produced in just two countries: South Africa and Russia.

While gold remains more popular than palladium among private investors, palladium is seeing expanded use in some industries. Provident Metals notes that analysts see a movement by many industries to replace platinum with palladium. That increased demand could drive this precious metal’s price upward in the future.

Gold vs. palladium: At a glance

	Gold	Palladium
Discovered	4000 BC or earlier	1803
Uses	Investment, electronics, jewelry, dental work	Investment, automotive industry, electronics, dental work
Spot price	$2,616 per ounce	$897 per ounce

Market dynamics and price trends

Gold has a long history as an investment and a store of wealth by both nations and individual investors. In 2024, the price of gold hit record highs thanks to various factors. These included falling interest rates, geopolitical instability, and large purchases by government central banks.

With many of these factors expected to continue in the new year, market analysts predict the price of gold will rise to new heights in the coming months.

Meanwhile, palladium is subject to different dynamics. Supply and demand for this metal are less established, and as a result, it has seen significant price volatility. In 2017, its value rose 50% when gold saw price increases of only 11%, according to Sharps Pixley, a UK precious metals firm.

However, the value of palladium has declined in recent years, and industry experts don’t expect a significant rebound in prices in 2025. Analysts from Heraeus Precious Metals believe that production of palladium should increase in the near future, while automotive demand will lessen as manufacturers move to electric vehicles.

What is palladium worth?

Palladium’s value is influenced heavily by both its availability and its industrial uses. Meanwhile, gold seems to be more reactive to economic conditions. Here’s how both metals’ prices have trended in recent years.

	2020	2021	2022	2023	2024
Gold	$1,774	$1,799	$1,802	$1,943	$2,387
Palladium	$2,179	$2,388	$2,061	$1,307	$924

About 80% of the world’s palladium supply is controlled by South Africa and Russia, according to Provident Metals. The analysts at Heraeus Precious Metals anticipate palladium production from both countries to increase in 2025 with an estimated 2% overall increase. At the same time, demand is expected to dip by 3%, largely because of changes in the automotive industry.

These current market trends have led Heraeus to predict that the spot price of palladium will range between $800 and $1,200 per ounce in 2025.

What is palladium used for?

Palladium has several practical applications and can be used in the following:

• Catalytic converters
• Electronic components, such as ceramic capacitors
• Jewelry
• Dental crowns and fillings

Gold can be used in many of the same items except catalytic converters. Gold is also highly valued in the aerospace industry and may be used for surgical instruments. Gold nanoparticles are even seen as a promising medical treatment for some cancers.

In the future, less expensive palladium may be used instead of gold or platinum for some industrial uses. That could help boost demand for—and the value of—palladium. However, the move to electric vehicles means fewer catalytic converters will be manufactured, which could potentially have the biggest impact on palladium’s price.

How to invest in palladium

You can invest in palladium in the same way as you would gold. These are the most popular options:

• Holding physical palladium: Just as you can buy and hold gold bars and coins, you can own physical palladium. However, not every precious metals dealer sells palladium. Anthem Gold Group is one top-rated dealer that offers palladium products.
• Precious metals IRA: Also called a gold IRA, these retirement accounts have tax advantages. However, they are also subject to IRS rules, and distributions could be subject to tax penalties if made before age 59½. Only palladium that is 99.95% pure and made by an accredited or certified manufacturer or a national mint can be held in a precious metals IRA.
• Palladium ETFs: Short for exchange-traded funds, palladium ETFs invest in physical metal and so their value tracks the metal’s value. These funds are ideal for those who want to invest in precious metals without needing to store and manage the metals themselves. There are also gold, silver, and platinum ETFs available.
• Mining stocks: You could also invest in companies that mine palladium. The value of these stocks is tied to the strength of the mining company rather than directly to the price of palladium. Some companies may mine multiple types of metal, meaning your investment isn’t tied to how well any specific metal is selling at a given time.

If you are interested in investing in gold or other precious metals, these options aren’t limited to palladium. For instance, a precious metals IRA can hold a mix of gold, silver, platinum, and palladium.

When evaluating different precious metals for investment, consider factors like their historical price performance, current market trends, volatility, liquidity, storage costs, industrial demand, correlation with other assets in your portfolio, and your personal investment goals and risk tolerance, with gold and silver often being the most popular choices due to their high liquidity and established market presence; research thoroughly before investing and consult a financial advisor if needed.

What is the best way to invest in palladium?

Which palladium investment option you choose depends on your financial goals. Those looking for a long-term investment may consider opening an IRA or purchasing physical metals. Mining stocks and ETFs may be better for those who are sure how long they plan to hold the investment.

Investment option	Best for
Palladium coins and bars	Long-term investors who want physical ownership
Precious metals IRA	Retirement savings
Palladium ETF	Investors who don’t want to store physical metals and want portfolio diversification
Mining stocks	Flexibility to pick and choose what firms you wish to own

Pros and cons of investing in palladium

All investments have potential benefits and risks. Before purchasing palladium, be sure you understand its pros and cons.

Pros

• More affordable

  Compared to gold, palladium is significantly less expensive. That makes this precious metal more affordable and accessible to investors with less capital.

• Diversification

  Whether you’re buying stocks or precious metals, it is always smart to diversify your holdings. Buying palladium—either as a physical metal, ETF, or mining stock—is one way to add another layer of diversification to your portfolio.

• Potential for rising demand

  There are some indications that palladium may replace gold or platinum in certain industrial uses. If demand rises, the value of palladium could increase as well.

Cons

• Limited availability

  Unlike gold, which is widely available, relatively few precious metals dealers sell palladium bars and coins. This limited selection can be a drawback when purchasing physical metal.

• Price volatility

  Gold has a long history of holding its value, but palladium prices have been more volatile. Limited supplies and changing industrial uses can impact palladium prices. As a result, palladium may be best for investors with a high-risk tolerance.

• Liquidity challenges

  Since palladium is very rare, it doesn’t have the same market as gold. That means that when it comes time to cash in your palladium, fewer buyers may be interested in purchasing it. That could make it more difficult to sell for top dollar.

Gold comes with many of the same benefits as palladium but fewer drawbacks. It is widely sought after and has less price volatility and more liquidity.

Should I invest in palladium vs. gold?

Gold is currently seeing high demand. Buoyed by central bank purchases and geopolitical uncertainty, gold prices could see new highs in 2025, according to industry observers. That means that if you buy gold now, you’ll purchase at or near record-high prices.

Palladium, on the other hand, is currently selling at a price far below its record high. That means you could purchase at a low price now and see your investment substantially increase in value in the future.

However, palladium’s future prospects are uncertain. With the move to electric vehicles—which do not have catalytic converters—industrial demand for palladium may wane, and that could affect its value. 

For those with a lower tolerance for risk, gold may be a preferable option to palladium. Of course, if you are looking to invest in precious metals, there is no reason why you can’t own both gold and palladium. You can learn more about all your options in our guide to investing in precious metals.  

If the investor is interested in precious metal investing, assess how easily you can buy and sell the metal without significantly impacting its price. 

Gold and silver generally have higher liquidity than platinum or palladium. Consider the cost of storing physical metals, including insurance and security fees. Exchange-traded funds can be a way to invest in precious metals without physical storage concerns. 

What is your investment goal and risk tolerance? Determine whether you are looking for a short-term speculative investment or a long-term hedge against inflation. If you have a low risk tolerance, consider allocating a smaller portion of your portfolio to precious metals.

FAQ

Why invest in palladium?

Investing in palladium can diversify your portfolio and help you hedge against inflation. Palladium is a rare precious metal with strong industrial demand for catalytic converters that reduce emissions, particularly in the automotive industry. As global efforts to limit pollution increase, demand for palladium may remain high.

Palladium has historically experienced price volatility, which can create opportunities for investors willing to tolerate risk in exchange for significant returns. For those already holding gold or silver, adding palladium can diversify exposure to precious metals.

Can I buy palladium from any gold dealer?

Not all gold dealers offer palladium; it’s a less common investment than gold and silver. However, many reputable precious metals dealers carry palladium coins, bars, and rounds. It’s essential to verify the dealer’s credibility before purchasing to ensure you’re buying authentic, high-quality palladium.

Our research determined that these are the highest-rated metals dealers that sell palladium. View our best gold dealers and best gold IRA pages to learn more about our recommendations and how we rate these companies.

What is the difference between platinum and palladium?

Platinum and palladium are precious metals in the platinum group, but they have crucial differences:

• Industrial use: Both are used in catalytic converters, but palladium is preferred for gasoline engines, while platinum is more common in diesel engines. With gasoline engines dominating global markets, palladium demand has surged in recent years.
• Rarity: Palladium is rarer than platinum, making it more susceptible to supply shortages and price spikes.
• Price: Historically, platinum was more expensive than palladium, but in recent years, palladium’s price has surpassed platinum due to increasing demand and tighter supply.
• Appearance: Palladium is slightly lighter and whiter in color compared to platinum, making it popular for jewelry and coins.

Investors often compare platinum and palladium for diversification purposes, but market trends and industrial demand may favor one metal over another at different times.