My newsfeeds are buzzing with news about a possible coronavirus vaccine. It’s in the works … they’re going to test it on animals … the Chinese may already be ready to test a version on people. The market is gasping big gulps of relief and heading higher. And there’s one metal that can do better than most.
I’m talking about palladium. Now, it was just a few weeks ago that I laid out my case for investing in palladium. That was BEFORE the coronavirus started raging across China, bringing that country’s transportation and industry to a near-standstill.
Palladium is mainly used in the catalytic converters of gasoline powered cars. It accounts for 85% of demand for the metal. A single car doesn’t need a lot but add up millions of new cars — more than 17 million new cars last year — and the reason demand is so high is clear.
So, you can see why the coronavirus would weigh on sentiment in this metal.
A vaccine would flip the script, pushing prices for industrial metals including palladium and copper much higher.
We’ll look at copper down the road. Today, we have an opportunity in palladium, which has solid fundamentals behind it.
There is a supply/demand gap in palladium. It has lasted for years, as you can see this from this chart using data from Johnson Matthey …
That 2020 price of palladium is Johnson Matthey’s forecast for the year — higher than palladium is now. One big reason: the deficit is projected to continue.
And that’s not all. Other forces to consider …
- Above-ground stockpiles are shrinking. The Russians usually make up the difference from their vast stockpiles, but they’ve been dragging their heels so far this year.
- More demand. Countries around the world are rolling out tighter emissions standards for gasoline-powered cars. That means more palladium per car. Automakers are panicking about future supply.
And that’s why prices are blasting off. Let me start with some charts. For starters, here’s how palladium has outperformed other metals since the start of 2019 …
Palladium is leaving platinum, silver and gold in the dust.
And here’s a shorter-term chart using the Aberdeen Standard Physical Palladium Shares ETF (NYSE: PALL). It holds physical palladium and tracks the price of the metal closely …
Looking at the chart, you can see that palladium sell off as the coronavirus fears panicked the market. But it didn’t sell off much. And now that there is hope for a vaccine, it’s taking off again.
Now, there are a few ways you can play this. One of the easier ones is PALL. And it’s a fine choice.
But if you’re willing to roll up your sleeves and do some homework, you can find stocks that are leveraged to the metal quite a bit.
For example, I just gave one to my Gold & Silver Trader subscribers, a stock with performance that looks like this …
That new pick is up 140% in the past year, while palladium is up 70%. And that run ain’t nearly done, hon! As palladium gets hotter, this stock will take wing.
My Gold X Indicator system caught on to this new pick. And this coming Tuesday, Feb. 11 at 2 p.m. Eastern, I’ll be hosting a FREE online training event where I’ll reveal, step-by-step, how this proven system works.
With the next rush in precious metals on the horizon, you’ll want to be able to identify which stocks have the potential to soar for quick returns of 370% … 639% … 1,186% … even 4,727%.
And to do that, you’ll want to click here to reserve your seat for my event.
In the meantime, if you’re looking for an entry opportunity into palladium, the recent pullback is probably the sign you’ve been waiting for.
But don’t wait too much longer. Palladium is revving its engine. The next move could be much higher.
All the best,