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The Precious Metals Composite (PMC) ounce is crafted to seek a better risk-adjusted return than any single precious metal alone, offering reduced volatility and a stable return profile. Each PMC ounce combines the strategic metals composition of:Gold: 3.5% – Silver: 93.75% – Platinum: 1% – Palladium: 1.75%This blend is designed to balance the market fluctuations of individual metals, reducing exposure to the volatility associated with any one metal while providing the benefits of a diversified precious metals portfolio. Today, we will focus on the Palladium piece.
Recent Palladium Market Trends and Technical Breakout
Palladium’s market dynamics have shown significant activity recently, driven by the USA’s call for G7 sanctions on Russian palladium exports, a critical move given Russia’s control of up to 40% of global supply. This geopolitical shift has fueled a rally in palladium prices, especially following a key technical breakout above the 50-day moving average back in early September. As palladium prices fluctuate due to these factors, the impact on diversified portfolios like the PMC ounce becomes more pronounced, underscoring its function as a balanced investment tool.
Cost Efficiency of Palladium in the PMC Ounce
Currently, the physical market for palladium investment products, such as bars and Palladium Eagles, is experiencing substantial premiums, making it costly for individual investors to purchase. Availability issues and market premiums make it nearly impossible to acquire palladium without significant additional costs. However, by holding palladium within the PMC ounce, investors can access this high-value metal at a fraction of the premium associated with bars or coins. This cost-effective structure allows PMC ounce holders to benefit from palladium’s price movements without overpaying for its physical form.
How Palladium Can Impact PMC Ounce Value
Palladium currently contributes approximately $21.25 to each PMC ounce. If palladium were to continue on its bull run and reach its historical high of $3,440 per ounce, its contribution would jump to around $60.25. Given the current PMC ounce price of about $159, this rise in palladium alone would add $39 to its total value, a 25% increase. This illustrates the strength of the PMC ounce’s diversified structure, where even a rally in one metal can meaningfully boost overall portfolio performance, even if the prices of other metals remain stable.However, in today’s bull market, a steady price for other metals is unlikely; recent gains across all precious metals reflect a broader uptrend, driven by heightened demand and global market factors. This suggests that an upward adjustment in the PMC ounce would likely capture gains from each metal, amplifying potential returns.
The Strategic Advantage of the PMC Ounce
As palladium markets face ongoing volatility and supply uncertainties, the PMC ounce provides a practical, diversified investment option. By including gold, silver, platinum, and palladium, the PMC ounce effectively spreads risk while capitalizing on market rallies, such as the recent breakout in palladium. For investors seeking precious metals exposure without the intense premiums and single-metal volatility, the PMC ounce stands as a cost-effective and resilient choice, offering the stability of diversification with the upside potential of individual metal price movements.More By This Author:How Debt And Gold Are Dancing Together: A Look At The Future
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