ST. LOUIS - Investment performance is all relative to the dates you pick, and the comparisons you make. Our analysis for the precious metals picks one date - 2000 - for the arbitrary benefit of being the start of a decade and a nice round number. The other date - November 2008 - is reasonably objective as the nadir of the credit crisis when most asset values bottomed out.
That's small comfort for the pension funds and other chasers who discovered commodities in 2007-8 and are only now breaking even in the base metals and "industrial" precious metals (silver, platinum, palladium). Gold has at least been steady if unspectacular by comparison.
Since the lowest point of the crash, palladium has easily outperformed the other precious metals, gaining 112% in 2009 and 91% so far this year based on monthly averages. It has been bid up so strongly that the platinum-palladium ratio has raced down to levels last seen in 2002 when the palladium bubble was bursting. The metal has a long way to go before it matches its late 2000 highs even in nominal terms.
Palladium appears to be on track to record two consecutive winning years against the other precious metals for the first time since the end of the last century. Gold is the only metal until now to have managed two-year winning streaks compared with its rivals - for 2000-2001 and 2007-2008.
There are several factors behind palladium's rise including Exchange Traded Commodity (ETC) activity and the apparent exhaustion of the Norilsk Nickel stockpiles. Whatever the cause, retail investors need to remain vigilant because the market is thin and susceptible to "management" by hedge funds and the like.
Taking 2000 as the starting point, gold has finally broken the current bull market performance record that was set by platinum in early 2008. It has gained 281% followed by silver with a 181% gain. Palladium has been the worst performing, but compared with other investment classes it still runs away from most.
(c) 2010, MineFund.com
