This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

How To Invest in Palladium

NEW YORK (TheStreet ) -- With gold prices hitting record highs, palladium is becoming a cheaper alternative for investors who want exposure to precious metals without the high price tag.

Palladium prices have popped almost 10% year to date after hitting a low of $395 and a high of $571. Palladium is typically used in auto manufacturing and prices are dependent on car sales and an improving global economic recovery.

The advent of the physically backed palladium exchange-traded fund, ETFS Physical Palladium Shares (PALL), however, has provided an easier way to invest and trade palladium. Since its creation in early January, the ETF has amassed a total of 788,505 ounces of palladium. The more metal ETF Securities removes from circulation, the higher prices rise. Shares have risen 3.2% year to date and the ETF currently has $358 million assets under management.

For investors looking for exposure to a riskier precious metal, many analysts recommend palladium. Soma sekhar Chereddy, analyst at Karvy Global Services, dubs the metal his favorite for 2010.

What is your long-term and short-term price target for the metal?

Chereddy: In 2010, we [think] the metal [will] touch around $675. By the end of this year, we [think prices will be] between $650 and $675. And over the next five years, we expect palladium to touch $1,000 an ounce. It's basically dependent on the long-term supply and demand situation. [We think] prices are going to double in the next five years.

What are some of the risks? What if China's growth slows [resulting in] deceasing auto demand, how do you hedge against those risks?

Chereddy: So 50% of demand comes from auto demand ... China just accounts for 13% for the auto production in the world. So ... we expect [a possible slowdown in China] not too dent [prices] so much ... Other metals, such as nickel, copper, are mainly dependent on China, but palladium is a different case, [palladium is] not dependent on China.

1 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,079.57 -42.44 -0.25%
S&P 500 1,996.74 -3.38 -0.17%
NASDAQ 4,557.6950 -11.9260 -0.26%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs