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Palladium

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With the impending release of the American Palladium Eagles, the first palladium-based official coin from the United States Mint, debates about the use of this precious metal have cropped up all over the place.

These American Eagles will feature the famed ‘Winged Liberty’ design created by Adolph A. Weinman on their obverses. This design was first used on the ‘Mercury Dime’ in 1916, and has enjoyed widespread popularity ever since its release.

Reportedly, American Palladium Eagles will be released in 3 variants – bullion, proof, and uncirculated. Even though the market is anxiously waiting for its release now, the decision to strike these coins was taken hesitantly.

Although palladium has extensive industry uses like gold does, it had not really caught on as a mainstay in precious metals investments until a few years ago. However, the recent surge in popularity of this metal indicates a paradigm shift in the minds of investors who see the value of adding palladium to their tangible assets.

This surge in popularity has propelled palladium prices by 20% (annualized over 2016), much higher than any other precious metal. Even though this meteoric rise in the value of palladium has persuaded many investors, a few still remain unconvinced.

Palladium is one of the rarest precious metals on Earth. Interestingly, it is 15 times rarer than platinum, a precious metal considered safe for investment. In fact, palladium is 30 times rarer than gold, which is widely considered a safe haven as an investment asset.

Although the United States does have palladium resources, the bulk of the world’s supply is mined in Russia (41%) and South Africa (38%).

The palladium market is just starting to bloom and the rarity of palladium, coupled with its broad variety of industrial uses, bode well for it as an investible precious metal. Investors and collectors can expect to see a wide range of palladium-based products cropping up on the precious metals market, as mints try to fulfill increasing demand for the metal.

However, just like any other precious metal, palladium prices will also fluctuate depending on the condition of the market at specific points of time.

Even though palladium hadn’t really caught on as an investible precious metal, palladium-based ETFs have existed on the market for much longer – displaying the confidence investors have had on the metal as an asset. One of the major contributors to the lack of palladium products in the market is its rarity, making it relatively difficult for interested individuals to obtain a quality palladium product, compared to say gold or silver.

The release of the American Palladium Eagle Coins by the United States Mint is expected to affect the market favorably, driving up investor confidence in palladium when an official bullion coin struck using the metal is available.

As an investible asset, the coming years seem to bode well for palladium products. If the Palladium Eagles are a success, as experts expect, we anticipate many more palladium-based rounds and bars crowding the market very soon.