InvestingInPalladium.com - Information on Investing in Palladium Coins and Bullion

Palladium coinage is currently limited to the Canadian Palladium Maple Leaf minted by the Royal Mint of Canada. This coin is available worldwide through bullion and coin dealers either as direct ship agreements with the Mint or secondary market acquisition. While the Royal Mint certification of authenticity is important, the premium you will pay over spot for these coins has been much higher than the price over spot of palladium bullion products. You could almost place the Maple Leaf in the numismatic category rather than as a bullion alternative. However, the backing of the mint can make these coins much easier to sell on the secondary market than related one troy ounce bullion products.

The primary bullion hallmarks sold in the USA are from PAMP Suisse and Credit Suisse. Recently, bars refined by the Russian Federation State Refinery have shown up on the American market. The Russian product tends to be of higher weight (greater than one troy ounce) than what is available from the other two refiners.

Palladium bullion can also be purchase for storage by outside entities. The ETFS Palladium fund does this with an equity product traded on a US stock exchange. Other bullion alternatives include "Palladium Pool" accounts maintained by Kitco. Kitco stores and makes a market for palladium in these pool accounts.

Since palladium is primarily an industrial metal, rather than a monetary metal, it is important to understand it may be more difficult to sell out of a physical position of this metal. For example, you may see many dealers advertising for the purchase of Gold and Silver while a few buy platinum. Rarely do you see dealers advertising for the purchase of palladium. The secondary market for palladium coins/bars is small which obviously makes the metal less liquid than the primary monetary metals. Therefore, if you want to "trade" palladium, your best vehicles are the exchange traded funds (PALL in US) or by pool accounts (Kitco).

Back to the monetary theme - I would not suggest buying palladium products for your end-of-the-world kit. Few people would even know that palladium is a metal let alone barter a loaf of bread for a gram of palladium if there was a monetary collapse.

Thursday, July 22, 2010

American Palladium Eagle Bullion Coins Sought

At the July 20 House of Representatives subcommittee meeting on "The State of U.S. Coins and Currency," Michael Clark, President of Diamond State Depository, expressed his industry's belief that the American Eagle Bullion Coin Program should be broadened with the addition of palladium bullion coins.

The US Mint's bullion coin program originally included only gold and silver coins, but was broadened in 1997 with the introduction of the American Platinum Eagle. This might set the precedent for another broadening of the program with the American Palladium Eagle.

Statements provided at the hearing cited potential demand for Palladium Eagle bullion coins from both collectors and investors. The coins were presented as an interesting pricing point for precious metals investors at $450 per ounce, compared to higher priced gold and platinum. The possibility that the new coins would absorb some of the demand for Silver Eagles was also mentioned.

During the question and answer session of the hearing, Rep. Ron Paul observed, "If we get the palladium coin... where are we going to get the planchets?"

The question referred to earlier discussions about the US Mint's current reliance on just three suppliers for precious metals blanks, the apparent bottleneck in the production of bullion gold and silver bullion coins. Platinum bullion coins have not been produced since late 2008, presumably due to the same planchet procurement problem.

Past efforts for U.S. coins struck in palladium have included bills introduced by Rep. Dennis Rehberg and Sen. Max Baccus, both from Montana. These bills have sought the production of Saint Gaudens Ultra High Relief Double Eagle Palladium Coins in numismatic and bullion versions. The bills S. 758 and H.R. 3405 were introduced on April 1, 2009 and July 30, 2009, but have not made any progress.

The United States was the world's fifth largest producer of palladium. The metal is mined in Montana and refined in New Jersey, California, and South Carolina.

The Royal Canadian Mint is the only major world mint to currently produce palladium bullion coins. They initially produced the Palladium Maple Leaf coins from 2005 to 2007, but the program was ended due to low sales. The RCM revived the program in 2009 when they identified greater market demand for a palladium bullion.

Bottom Line: Do your research, invest wisely, and be nimble to avoid being squashed by the big players.

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