Thesis

Palladium outperforms the other precious metals because it benefits from a very niche automotive demand. Technology is driving improvements in automotive catalyst designs, allowing machinery parts that were once fabricated with platinum to be replaced by palladium.

These technological improvements are the cause of palladium’s strong performance relative to platinum. And the upward pressure in palladium and the downward pressure in platinum will continue until the two metals reach per-ounce parity so investors can go long on palladium and short on platinum for a market neutral pair trade.

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