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Feb. 22, 2020, 2:29 p.m. EST

Tesla isn’t the only ‘green hedge’ that’s been on an absolute tear lately

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By Shawn Langlois, MarketWatch


iStockphoto
Macro image of a one ounce Palladium bar and a financial chart

Do you believe the world will embrace a green path toward the future?

If so, you might want to consider slapping a palladiumposition next to your Tesla /zigman2/quotes/203558040/composite TSLA +5.62% shares in your portfolio, according to the investor behind the Market Ear blog .

“Palladium is a key component in pollution-control devices for cars and trucks,” he wrote. “About 85% of palladium ends up in the exhaust system in cars, where it helps turn toxic pollutants into less-harmful carbon dioxide and water vapor.”

Of course, as you can see by this Market Ear chart (which was highlighted in our “Need to Know” column), buyers have already been flocking:

ED&F Man Capital Markets analyst Edward Meir made the comparison to Elon Musk’s company in a recent interview with Bloomberg News .

“Palladium has been unbelievable — it’s like the Tesla stock of commodities,” he said. “Prices are caught up in the rally in precious metals. Whenever these metals rally palladium tends to move as well, but by a greater magnitude.”

The rally in palladium has also been goosed by expectations that China will enforce stricter environmental standards that will trigger increased demand.

Meanwhile, prices just keep pushing deeper into record territory. Palladium added another 1% to $2,598.60 Thursday. Tesla closed down 2% at $899.41.

Don’t expect the market to dry up anytime soon, either. According to Anglo American Platinum, global demand for palladium will exceed production by 1.9 million ounces this year, though the company said in its annual report that auto makers may start using more platinum as an alternative.

/zigman2/quotes/203558040/composite
US : U.S.: Nasdaq
$ 480.01
+25.54 +5.62%
Volume: 22.56M
April 3, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$88.51 billion
Rev. per Employee
$439,627
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Shawn Langlois is an editor and writer for MarketWatch in Los Angeles. Follow him on Twitter @slangwise.

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