This Day On The Street
Continue to site
ADVERTISEMENT
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

PALL: Good in Small Doses

NEW YORK ( TheStreet) -- Gold's laggard performance has been one of the more interesting stories to watch in 2012. After last year's breakout performance, easing macroeconomic concerns and coyness on the part of the Federal Reserve regarding new rounds of quantitative easing have helped to knock the highly sought-after yellow metal from its upward path.

For evidence of this disappointing showing, investors need only compare the performance of a bullion-backed gold fund like the iShares Gold Trust (IAU) to that of a product linked to a fellow member of the precious metals arena, like silver or platinum. Since the start of the year, IAU has risen approximately 5%. The iShares Silver Trust (SLV) and the ETFS Physical Platinum Shares (PPLT), meanwhile, have enjoyed gains of more than double this magnitude.

Gold will be interesting to watch in the coming weeks and months as the threat of global fears persist and investors look for stirrings of life, but it is not the only precious metal-related topic to keep an eye on. Palladium may also find itself in the spotlight soon.

Based on the standout performances seen from SLV and PPLT, it is clear that the opening months of 2012 have been kind to industry-linked precious metals. Some, however, have not been so lucky. Palladium, for example, has been a notable laggard, underperforming not only silver and platinum, but also gold. It remains in positive territory, but since ringing in the new year, the ETFS Physical Palladium Shares (PALL) have risen a paltry 2%.

Palladium's subpar performance in 2012 may be alarming for aggressive investors who, in the past, have turned to this inherently volatile metal for magnified gains during periods of market optimism. These individuals, however, should not give up on either the commodity or funds like PALL. Looking ahead, fundamentals indicate that palladium's losing streak may soon end and prices could be in store for an impressive turnaround in the very near future.

This week, The Wall Street Journal notes that both the supply and demand prospects for palladium are improving. In regards to the former, the report points to diminishing stockpiles in Russia. Meanwhile, continued consumer desire for automobiles in the United States and China will help to keep demand piqued.

China's efforts to reduce emissions helps to further sweeten the metal's outlook. Palladium is used extensively in the car manufacturing industry as a key element in the production of catalytic converters.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
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!
SYM TRADE IT LAST %CHG
IAU $11.40 0.00%
PALL $74.56 0.00%
PPLT $108.87 0.00%
SLV $15.06 0.00%
AAPL $130.28 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs