Palladium Soars 47% as the World Gives Up on It
The Lac des Iles mine in Ontario, Canada is set to shut down in less than a year... despite plenty of palladium left in the ground.
This month, $9 billion miner Impala Platinum (IMPUY) announced it would walk away from the mine a year ahead of schedule.
A company spokesperson blamed the closure on low palladium prices. After a multiyear slump in the metal, the mine was "not generating the cash flow required to sustain the operation."
With palladium mines shutting down, it'd be easy to assume that the metal will continue underperforming...
But it's essential to remember that mines are in the business of supply and demand – not the business of helping investors.
If there is enough demand for a commodity like gold, silver, or palladium, a mine will open. And if demand dries up, mines will shutter.
But when it comes to investing, mines have a knack for closing exactly when you need them most. And that gives us an opportunity in palladium today.
Let me explain...
Idaho's Sunshine Mine was one of the biggest and richest silver mines in the world. Over its lifespan, it yielded more than 360 million ounces of silver.
But the 1990s proved a tough time for the silver-mining industry. By 2001, prices had been sideways for more than a decade. The Sunshine Mine couldn't weather the storm. It became unprofitable and ceased operations that year.
But it couldn't have had worse timing. Take a look...
From the time Sunshine Mine shuttered in the first quarter of 2001, silver rallied 1,034% in 10 years.
In other words, the closure of the Sunshine Mine just about coincided with the bottom in silver prices.
But this phenomenon isn't limited to silver. We've seen it in gold, too...
In 2001, the Sadiola Exploration Company opened the Yatela Gold mine in Mali. But by the mid-2010s, gold prices had been in a multiyear slump... forcing Sadiola to abandon the mine in 2016.
Again, the timing couldn't have been worse. Gold found a price floor right around the same time. And it soared roughly 100% over the next few years. Take a look...
Once again, the mine's closures marked a bottom for prices – not the top.
And that brings us back to today...
After years of palladium underperformance, Lac des Iles in Ontario is closing.
And yet, palladium is now entering a new uptrend. Take a look...
Palladium is catching a bid even as miners throw in the towel. And with work stoppages like the one in Ontario, don't expect more supply to come on line soon. Instead, get ready for a squeeze...
And given palladium's 47% rally since April 7, the price chase may already be on.
If you want to add palladium to your portfolio today, you can do so with the abrdn Physical Palladium Shares Fund (PALL). This fund directly tracks the spot price of palladium and is a great way to own the metal without storing it physically.
Palladium is cheap, hated, and in an uptrend. Those are three key ingredients to a sustainable bull run.
Don't miss out on this beaten-down metal's comeback. Add PALL to your portfolio today.
Good Investing,
Sean Michael Cummings
Further Reading
By settling for index funds, most investors accept predictably average results. But history shows stocks move in clear seasonal patterns. And those who understand these patterns can time their moves with precision and stay ahead of the crowd.
Flashy tech trends have dominated market headlines this year. But the market's best-performing stocks don't come from AI. Instead, this sector has quietly surged more than 50% this year. And most investors still aren't paying attention – which means this rally may just be getting started.
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