Thursday, April 24th, 2014 MST

Palladium Coins and Bullion Bars as Investments

Palladium bullion bar and coin investors have few palladium investment choices today. When palladium spiked to $1100 in late 2000, most palladium investors sold their bullion coins and bars into that rise and exited the market. During the ensuing years, the demand for small palladium coins and bars was so small that most mints quit producing palladium bullion coins and private refineries ceased making palladium bullion bars.

Because it was industrial buying that sent palladium soaring-and not palladium investors-nearly all palladium bars and coins sold in 2000 ended up being melted. Now, though, palladium bullion bars and coins are being produced to meet renewed palladium investment demand.

Popular forms of palladium are 1-oz Credit Suisse and 1-oz PAMP bullion bars, both of which are refined in Europe. In late 2005, the Royal Canadian Mint began striking 1-oz Palladium Maple Leaf coins, which could prove to be investor favorites for palladium investments. Although Credit Suisse and PAMP are respected names in precious metals refining, many investors prefer coins produced by government mints.

Occasionally, palladium coins and bars, which survived the 2000 melt, will show up in the secondary market. Generally, secondary market palladium coins and bars can be purchased at lower prices than newly-made bars and coins.

Palladium Bars

Palladium, the metal

Palladium is one of six metals that form a group of elements referred to as the platinum group metals (PGM). Palladium has a resistance to oxidation, one reason palladium is growing in popularity for jewelry, especially in Asia. Still, the primary use for palladium is in autocatalytic converters, where palladium reacts similarly to platinum in combating pollutants. Herein lies the reason for volatile prices in the palladium and platinum markets.

Palladium, the market

From time to time, it seems about every five to seven years, some major auto maker and its catalytic converter manufacturer announce that they are switching from platinum to palladium, or vice versa, in the manufacture of converters. This causes the metal being dropped to fall in price and the metal doing the replacing to rise in price. Frequent production and supply problems in South Africa and Russia, the two major sources of platinum and palladium, add to volatility in the metals’ markets.

Only rarely does CMIGS make recommendations on palladium or platinum because it is difficult-if not impossible-to anticipate the next bombshell to be dropped on the palladium or platinum market. However, when palladium or platinum trade at double the price of gold, we suggest that investors owning palladium or platinum consider trading for gold or silver.

Investors interested in buying palladium coins or bars should try to buy when palladium is trading at or below its 200-day moving average.

Palladium coins as money

Despite numerous government mints having produced palladium coins in recent years, palladium does not have a history of being used as money. The mints turned out palladium coins solely to take advantage of the excitement surrounding palladium as it was heralded as platinum’s replacement. As it turned out, palladium and platinum have taken turns replacing each other and causing volatile price swings in both metals.

If you want to discuss investing in palladium bullion bars or coins, give us a call. The links in the far right column will take you to pages that discuss the individual palladium coins and palladium bars that are presently being produced.