What research is available bearing on silver, platinum and palladium as investments? In their April 2017 paper entitled “The Financial Economics of White Precious Metals – A Survey”, Samuel Vigne, Brian Lucey, Fergal O’Connor and Larisa Yarovaya summarize the body of academic research on the financial economics of silver, platinum and palladium. The survey covers relevant studies of market efficiency, predictability, behavioral influences, diversification benefits, volatility drivers, macroeconomic influences and relationships with other assets. Based on this research, they conclude that:
- There is little research available on platinum and palladium compared to silver and gold, reflecting their primary role as industrial metals.
- Investment research focuses on UK and U.S. price behaviors of the three metals, not any underlying supply and demand drivers or opportunities in other markets.
- The three metals are distinct in their relationships/hedging properties with respect to other assets, such as crude oil.
In summary, the body of research is relatively thin for platinum and palladium compared to silver and especially gold.
Cautions regarding conclusions include:
- The paper is largely a recitation of past research with little commentary on import and quality of findings.
- Recent introduction of exchange-traded products for the three metals may affect their behaviors.
See “Research on Gold as an Investment” for a comparable survey of research on gold.
