Much like other futures contracts, palladium futures are a standardized exchange traded contract in which buyers agree to accept delivery of a previously determined quantity upon contract expiration. Knowns as the jack of all trades, Palladium is often recognized as the most versatile of all metals traded on the CME. Palladium is used in everything from civil engineering to dentistry. However, it wasn’t until recently that palladium futures started to become popularly traded contracts. Experts point to the rapid economic expansion in countries like China as the motor behind the recent palladium futures surge.
Palladium Futures History
Palladium is a man-made made metal that was first discovered in 1803 by William Hyde Wollaston when he mixed nitric acid and hydrochloric acid and noticed that his experiment left behind a shiny new element. The element, named palladium became popular in the creation of jewelry, but there wasn’t much use from it outside of that. However, in the late 1980’s it was discovered that palladium acted as a great material for the catalytic converter in automobiles, and to this day is still the primary material used in production. It was this discovery that really caused palladium futures trading to pick up steam.
Palladium Futures Facts
Russia, North America, and South America make up the lions share of the world’s palladium production. Although Palladium is in the same metal grouping as platinum, palladium is more common than platinum. Palladium futures contracts offer great advantages when they are used as a hedging tool and can appeal to both producers and consumers
Palladium Futures Trading
- Palladium is traded on the CME Globex, CME ClearPort, and Open Outcry
- Palladium futures contract delivery may begin on the first business day of the delivery month and may continue up until the last business day of the delivery month
- Because of its use in catalytic converters, the palladium futures market often ebbs and flows concurrently with automotive production
- Along with vehicle demand, inflation and its relation to the U.S. dollar, and recycling are two large factors that influence palladium price.
Palladium Futures Contract Specs
|Contract Symbol||Contract Unit||Price Quotation|
|GPA||100 troy ounce||dollars per troy ounce|
|Trading Exchange||Trading Hours||Tick Value|
|CME Globex||Sun-Fri 17:00-16:15||$0.05/troy oz|