The U.S. consumer price index showed a 2.9% annualized rise in mid-2024, reflecting above-target inflation. Central bank policies, including low interest rates and increased money supply, have led investors to seek inflation hedges. Precious metals, particularly palladium, have emerged as attractive assets for investors looking to safeguard their portfolios.
Investing in physical precious metals through exchange-traded funds (ETFs) has become a popular strategy. These ETFs offer a straightforward way to gain exposure to metals like gold, silver, platinum, and palladium. Among the various ETF options, those focused on holding physical metals have shown a close price correlation to the actual metal prices, making them a preferred choice for investors seeking direct exposure.
SPDR Gold Shares, the largest gold ETF, provides investors with an opportunity to benefit from gold price movements without owning physical gold. Its liquidity and relatively low expense ratio make it an attractive investment option. Similarly, iShares Silver Trust, the leading silver ETF, allows investors to participate in silver price movements with minimal hassles and risks associated with alternative investments.
For those interested in platinum, the abrdn Standard Physical Platinum Shares ETF offers direct exposure to this precious metal primarily used in the automotive industry. The ETF holds physical platinum bars in bank vaults, providing investors with a unique investment avenue. Additionally, the abrdn Standard Physical Precious Metals Basket Shares ETF offers diversified exposure to gold, silver, platinum, and palladium in one investment vehicle.
Investors looking to specifically target palladium can consider the abrdn Standard Physical Palladium Shares ETF. With palladium’s industrial applications in catalytic converters and limited mining focus on this metal, the ETF presents a viable option for gaining exposure to palladium price movements. Despite the challenges of investing in rare metals, ETFs like these provide a convenient and cost-effective way to include them in a diversified portfolio.
As inflation concerns persist and investors seek alternative assets to hedge their portfolios, precious metals ETFs, including those focusing on palladium, offer a compelling investment opportunity. These ETFs provide a convenient way to access the precious metals market, offering potential benefits in times of economic uncertainty and inflationary pressures.