I am new to the metals market as I only started to acquire bullion two months ago. I have been dollar cost averaging into silver, palladium and platinum, one ounce maple coins. But in doing more research on these metals I discovered rare earth elements and began to get bullish on them as just by shear logic, the rarer they are the more dear they will become. Especially since they are used in so many modern technologies. Just wondering if others have an interest in them as well, and what the best way would be to invest in them would be? At the moment looking at some junior miners. Thanks
I agree with investing in palladium i think it has excellent potential at these sub $300 levels. It is 10x rarer than gold and much cheaper. Also since it has its own futures contract & etf on the LSX it makes it ez for speculative bubbles to form. You can invest in rhodium at kitco.com which I think would defiantly qualify as a rare earth element. Also check commodityonline.com and resourceinvestor.com I think they have some info on investing in rare elements. cheers
When I was younger, I loved buying and collecting gold coins... and also silver. I knew palladium was cheaper than gold, but 10x rarer?? How can that be?
No, it doesn't. But when rare materials are being used more and more and society becomes dependent on these items, it makes sense that the price would increase. I need to do more research on this, but so far I feel quite bullish for the longer term.
How to you invest in palladium? Hold bullion, mining companies or futures? I have just started to acquire Maple Leafs, and looking into some junior miners.
What I'd do to invest would be to buy a few 10oz bars, cuz Im a sucker for physical. If you pay more than 3% above spot thats too much. Not only would I buy physical, I would buy palladium futures contracts. I would keep on rolling the contracts over until I got my target price. This is the specification for the palladium contract: Contract Size 100 Troy Ounces Contract Months All Months Settlement Physically Delivered Tick Size 0.05 = $5.00 Trading Hours 6:00 PM - 5:15 PM ET Initial Margin $3,713.00 Maintenance Margin $2,750.00 Daytrading Margin n/a First Notice Day 8/29/2008 Last Trading Day 9/26/2008 To enter into 10 contracts, you would need $37,130.00. Palladium is currently trading at $290.50. If you kept on rolling over the contracts and palladium went to $500, you make $209,500.00. That number is profit, not total. The total value of your account would be $246,630.00. Now on the other hand if palladium went to 280.87 you would hit the maintenance margin and get a margin call. So you would either have to fork over more money or exit the position. So practically, one would need significantly more than 37k to enter such a trade to be on the safe side. Paper destroys physical in return. But anyway if your not rich enough to buy 10 contracts, depending on your portfolio size you could probably get long a contract or two safely and reasonably with still high potential profits.