Are Palladium Coins a Good Investment? | 2024 Analysis
Palladium coins are an underrated way to invest in precious metals. Palladium bullion is one of the most in-demand precious metals on the planet. Catalytic converters, fuel cells, and several other important technologies use palladium. Even without considering palladium’s exceptional industrial usefulness, the precious metal’s history of scarcity makes it a premier vehicle for investors looking to start buying precious metals.
Are palladium coins a good investment? Palladium coins are sold at higher premiums than bars, but they also offer beautiful designs and elevated numismatic appreciation potential. Ultimately, palladium coins are a fantastic choice for any investor who wants to stack a useful, historically valuable precious metal.
What is Palladium?
Palladium is a part of the platinum group of precious metals. It’s actually pretty easy to mistake palladium for platinum, because both metals have a similar color and shine. Palladium is slightly harder than platinum, making it a more durable option for collectors who choose to invest in palladium jewelry.
Compared to other precious metals, palladium is a relatively new discovery. William Hyde Wollaston discovered palladium sometime in July of 1802 and sold a small amount of it at a local shop.
Palladium was used in some medical treatments in the 1800s, but it really took off as an industrial component with the advent of the catalytic converter in the 1970s. Platinum and palladium are both integral parts of catalytic converters. Palladium’s scarcity and usefulness has helped make it one of the most expensive precious metals on Earth.
Why is Palladium So Expensive?
Palladium prices are high because of a combination of industrial demand and scarcity. In other words, palladium is expensive because it is both rare and useful. In 2024, global demand for the metal is projected to climb. When we combine palladium’s increasing industrial demand with growing fears of supply disruptions, it’s clear why the metal is so expensive.
Industrial Uses for Palladium
According to The Assay, palladium is around 15 times rarer than platinum bullion. Remember: platinum is even rarer than gold.
Plenty of products are rare but cheap. Palladium’s value comes primarily from its usefulness, which increases demand for the metal. Palladium bullion is a key component of catalytic converters, energy cells, dentistry equipment, and more. Palladium demand in the automotive industry is projected to climb this year, which could be good news for palladium stackers hoping for a breakout 2024.
What is Palladium’s All Time High?
Compounding palladium’s high price is the metal’s global scarcity. Fears of supply disruption during the outbreak of the Russia-Ukraine war drove palladium prices to record heights in March 2022. Shortly after Russia’s invasion of Ukraine, palladium’s spot price skyrocketed to $3,440.76 per troy ounce.
This wasn’t much of a surprise to precious metal experts, considering that Russia is the world’s biggest producer of palladium. Fears that the country’s war with Ukraine would disrupt their palladium production and transport operations led palladium to a record-breaking price run just two years ago.
Palladium Price Forecast | Updated for April 2024
The first half of 2024 is shaping up to be very good for palladium investors. The metal spent most of this year below the $1,000 support line, but palladium jumped above $1,050 early in April.
While palladium appears to be riding the same wave that pushed gold to several new all-time highs in March, it’s tough to predict where the metal may move in later 2024. Experts are divided on whether or not palladium could sustain its current bull run as the year continues.
In 2024, investors should expect palladium’s price-action to align closely with global supply and demand dynamics. Analysts remarked that palladium’s 2023 price crashwas the result of existing stockpiles and a switch from palladium to platinum in the automotive industry. Supply shortages and geopolitical uncertainties drove the metal’s 2022 price run, but the 2023 market correction was harsh as global demand failed to outpace extensive palladium stockpiles.
For investors looking for a palladium breakout in 2024, all eyes are on supply and demand. According to CPM Group Vice President Rohit Savant, “existing stockpiles and […] investor shorting” will characterize price-action for palladium in 2024. Significant supply disruptions or shortages would be big for palladium bulls, but the current trajectory spells trouble for the precious metal in 2024.
Palladium prices are only likely to increase in 2024 if global demand begins to outpace existing stockpiles of the precious metal. It’s hard to say whether or not this will happen. Several geopolitical conflicts could set the stage for a breakout 2024 for palladium.
In particular, experts warn that developments in Russia and in South Africa could be important to watch for investors sitting on a palladium hoard. These two countries are – by far – the world’s largest annual producers of palladium bullion. In Russia, the ongoing invasion of Ukraine could potentially create a palladium shortage – especially if other countries intervene in the conflict.
South Africa’s general election will happen on May 29th. Since the struggling South African mining sector accounts for such a large percentage of the country’s GDP, it’s likely that the industry will be a major point of contention among political nominees vying for power in 2024.
Supply shortages in either country would have a near-immediate impact on palladium prices. Until such a disruptive shortage happens, palladium will continue to struggle to gain footing above the $1,000 support.
Popular Palladium Coins
Palladium coins are a popular way to invest in palladium bullion. Some of the most popular coin designs in the world are available in palladium. Investors who are interested in buying palladium should consider some of the leading coins on the market, including the American Palladium Eagle and Canadian Palladium Maple.
Although palladium coins are becoming a more popular staple for coin collectors, the palladium market isn’t quite as robust as coin markets for gold, silver, and platinum. As we’ll note later in this guide, palladium coins offer beauty and investment potential – but minimal variety.
Comparing Palladium Coins Vs. Bars
Palladium coins and bars are both good options for collectors who want to invest in palladium bullion. Palladium bars are usually sold at a lower premium than palladium coins, since bars are cheaper to produce and feature fewer intricate, detailed designs.
We recommend palladium coins for investors who appreciate beauty and numismatic value in their precious metal investments. Like gold, silver, and platinum coins, palladium bullion coins are valued for more than just their precious metal content. In fact, some of the government coins with the tightest buy-sell spreads are now available in palladium.
Take a look at this comparison of palladium coins and bars:
| Palladium Coins | Palladium Bars |
|---|---|
| Higher Premium Costs | Cheaper Premiums |
| High Numismatic Value | Minimally Collectable |
| Beautiful Artwork | Basic Designs |
| Minimal Variety | Wide Selection |
Investors trying to choose between palladium coins and bars should consider their investment objectives. Palladium bars are the better choice for budget investors, but palladium coins offer more collectable value and beauty than bars.
Are Coins the Best Way to Stack Palladium?
Coins are the best way to stack palladium for investors who prefer beautiful and collectable bullion investments. If you want to get as much palladium as possible for your money, the high premiums charged for palladium coins might be off putting. Generally, budget investors should focus their efforts on stacking bullion bars instead of coins.
Pros and Cons of Investing in Palladium Coins
Like any investment, buying palladium coins comes with both pros and cons. Palladium coins are beautiful, collectable, and in-demand, but they’re also sold at higher premiums and offer a minimal variety compared to other bullion products.
Pros of Buying Palladium Coins
Beauty and collectability, numismatic value, and high industrial demand for palladium are three benefits to investing in palladium coins.
Beauty and Collectability
Palladium coins are beautiful and easy to collect. Fans of classic coins like the American Eagle or Canadian Maple should be excited to hear that these coins are now available in palladium. Some investors love to complete collections of these famous coins using a variety of different metals.
The American Palladium Eagle is equipped with a unique design that is only used on the palladium version of America’s most popular bullion coin. For the Canadian Palladium Maple, investors will find the same designs used on the Gold and Silver Maple.
Palladium coins look a lot like platinum coins, but they have a distinct shine that makes them unique and remarkable collectable products. This collectability is important, as it gives palladium coins a numismatic value that most palladium bars can’t offer.
Numismatic Value
Another advantage of stacking palladium coins is their numismatic value. Numismatic bullion products are valuable for more than just their precious metal content. Typically, coins that are exceptionally beautiful, rare, or collectable are considered numismatically valuable.
Palladium coins, especially those from popular coin series, are numismatically valuable. We highly recommend adding numismatically valuable products to your precious metal collection. When you invest in numismatics, you give yourself another method of profiting. Even if the value of palladium decreases, your palladium coins might become more valuable as investor interest/demand increases.
Industrial Demand for Palladium
Both palladium coins and bars benefit from exceptional industrial demand. Most precious metals are useful outside of the investment market, but platinum and palladium are especially necessary to the modern industrial economy.
Palladium’s primary use-case is in catalytic converters. Catalytic converters work to filter out the unnecessary and harmful byproducts produced by a vehicle’s exhaust. In gasoline-powered vehicles, platinum and palladium are used interchangeably. The automotive industry accounts for the lion’s share of global demand for palladium. The Observatory of Economic Complexity findsthat catalytic converters make up 80% of demand for the precious metal.
The high industrial demand for palladium makes palladium coins an excellent investment. Aside from numismatic value appreciation, palladium coins can become more valuable when demand for the technologies that use palladium increases.
Cons of Investing in Palladium Coins
Palladium coins aren’t a foolproof investment. There are two main downsides to investing in palladium coins: high premium costs and limited selection/variety. For investors who prefer low premium palladium, bars are a solid alternative to coins. Palladium bars might also offer a larger variety, as only a few government mints currently produce palladium coins.
High Premium Costs
Palladium coins are sold at high premiums over spot price, which can make these products a more expensive way to invest in palladium than bars. Premiums are a necessary evil for precious metal stackers. But the amount of premium investors are expected to pay varies from product to product.
Coins are typically more expensive than bars because the cost of producing a bullion coin is higher than for a bullion bar. Palladium coins are a more expensive way to invest than palladium bars for the same reason.
Investors who are working on a budget or who prioritize low premium investment products should consider putting their money into palladium bars instead of coins. Still, some collectors find that the numismatic value and beauty of a palladium coin justifies the increased premium cost of this product type.
Limited Selection/Variety
Palladium coins are becoming more popular, but they’re still not quite as common as platinum, gold, or silver coins. For this reason, investors won’t find all of their favorite coins available in pure palladium.
The good news: several of the most popular coins on the market are sold in palladium. American Eagles and Canadian Maples are both available in high quality palladium bullion, making these two coins a popular choice for investors looking to invest in palladium for the first time.
Palladium bars also offer a wider weight variety than most palladium coins. Because palladium coins are a relatively new model for investing, government mints like the U.S. Mint haven’t started manufacturing fractional palladium coins. For this reason, palladium bars might be the better choice for investors on a budget.
If you have specific preferences for your bullion coins, be sure to check our website and see if we have a palladium version of your pick in stock. Because palladium isn’t as popular as other investment-grade precious metals, limited selection is always a concern for palladium coin stackers.
Are Palladium Coins an Underrated Investment?
Palladium coins are an excellent investment because of their numismatic value, industrial demand for their underlying metal, and potential for profit. With palladium prices once again soaring, it might be time for stackers to try investing in one of humanity’s most useful and in-demand precious metals.