A Cheap and Hated Way to Play the Precious Metals Boom By Sean Michael Cummings, analyst, True Wealth
The history books may remember 2024 as "the year of precious metals"... Gold has soared 14% year to date. Silver has climbed even higher, up 17% so far. And even copper has joined the surge – jumping about 9% since the start of the year. Today, all three commodities are at multiyear highs... with gold bumping up against its all-time high. In short, it's a great time to go long on precious metals. But you might get "sticker shock" after looking at their price tags. Fortunately, the market is offering us another way into the metals market today... One precious metal is still absolutely hated by investors. Its price has been cut by more than half since its recent peak. And as I'll explain today, it's coming off its biggest sentiment bust in more than a decade. Even if you're actively investing in precious metals, you might not think much about palladium... It's a chemical cousin to platinum. We typically associate platinum with jewelry... But palladium has a more industrial job. It goes into gas-powered cars' catalytic converters and helps neutralize toxic emissions. It's a key commodity for the green-energy movement. Palladium has been plunging since March 2022. And its price has taken a beating. Take a look... Palladium has fallen 65% since peaking in March 2022. But now, we're seeing some signs that the worst is over... For starters, investors hate palladium today. We can see this by looking at palladium's Commitment of Traders report. This weekly report tells us what futures traders are doing with their cash. And it's a useful contrarian tool at extremes. Over the past decade, these traders have turned extremely bearish on palladium. Check it out... When these folks stack up bearish bets, it usually means a rally is likely. So, palladium is at its most hated level in more than a decade... And prices have come crashing back to earth. We have a cheap, hated setup. That's a great recipe for a future boom. The pieces are in place for a rally. All we need is an uptrend to know the tide is turning... And that could come sooner than you might think. Palladium is climbing fast. It soared 21% from its low in February. That's a heck of a rally. And with sentiment so low, there's plenty of dry powder left to send prices higher. Still, this turnaround is in its early stages. Cautious investors might want to wait until palladium prices break above their long-term 200-day moving average. That's a common measure of the trend. When this happens, it will be a strong signal that the new bull run is on. And when the time is right to take advantage of the opportunity, I suggest looking at the Abrdn Physical Palladium Shares Fund (PALL)... PALL holds physical palladium bullion – and nothing else. It's a pure play on the price of palladium. And because it's a fund, investors can buy in easily, without worrying about owning and storing the metal themselves. Today, palladium is cheap. And it's more hated than it has been in 10-plus years. That's a great setup for a long-term boom... So be ready to dive in with both feet once the uptrend is in place. Good investing, Sean Michael Cummings Further Reading Investors are still indifferent toward gold's bull run. That won't last forever... Once sentiment reverses, a new wave of buyers will flood the market. And that will only push prices higher from here... Read more here. Gold recently rallied for nine consecutive days. This is a rare situation – even in a bull market. And according to history, it's a strong sign that more gains are on the way... Learn more here. |
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Viper Energy (VNOM)... oil and gas
Southern Copper (SCCO)... copper
Wheaton Precious Metals (WPM)... precious metals
Teck Resources (TECK)... mining
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