Palladium has a New Vehicle for Demand - A US Bullion Coin

Palladium now has a new vehicle for demand. We have seen ETFs arise and education grow for this lesser known precious metal, but now coin collectors may have a new US palladium coin to collect. The American Eagle Palladium Bullion Coin Act passed through the House of Representatives on September 29, 2010 and the Senate on November 30, 2010. All that stands in the way of Act H.R 6166 becoming reality is the ‘John Hancock’ of President Barack Obama.

Palladium now has a new vehicle for demand. We have seen ETFs arise and education grow for this lesser known precious metal, but now coin collectors may have a new US palladium coin to collect. The American Eagle Palladium Bullion Coin Act passed through the House of Representatives on September 29, 2010 and the Senate on November 30, 2010. All that stands in the way of Act H.R. 6166 becoming reality is the ‘John Hancock’ of President Barack Obama.
 
Aside from being a compulsive saver, I am an amateur numismatic, so this is exciting on three levels for me. 
 
1) A new coin to collect
2) A new vehicle to be able to invest in physical palladium
3) A new demand mechanism for Palladium
 
Digressing, the US has been producing bullion coins for some time. The American Silver Eagle has been around since November 24, 1984, is 1 troy ounce, 99.9% pure silver and has a face value of US $1.00. The American Gold Eagle also has been in existence since 1986 and has four denominations.  All of the gold bullion coins are 22 karat (91.67% gold, 3% silver 5.33% copper). 
 
1 oz – Face Value US $50.00
½ oz – Face Value US $25.00
¼ oz – Face Value US $10.00
1/10 oz – Face Value US $5.00
 
The one exception to the American Gold Eagle, is the US Buffalo coin. This has been in existence since June 2006 and is 24 karat (99.99% pure gold). This has a face value of US $50.00.
 
As the potential and demand of platinum became more prevalent, the United States began producing the American Platinum Eagle Coins in 1997. These are 99.95% pure platinum and, like gold come in four sizes and denominations.
 
1 oz – Face Value US $100.00
½ oz – Face Value US $50.00
¼ oz – Face Value US $25.00
1/10 oz – Face Value US $10.00
 
Granted, the face values are to be technically legal tender, but are almost never used as such. The intrinsic value is what is important and the reason it is collected by investors.
What is most important with all of these bullion coins, at least for the US economy aside from another revenue stream for the government, is that law states that the metals must come from the US. 
 
The question one should ask is, “how may mining companies in the US mine palladium?” One. Stillwater Mining (NYSE:SWC) in Montana.  
Palladium is now US $757 per ounce. Could this affect the price? Without question. However, Stillwater Mining was dealt w huge blow, when General Motors said it would look elsewhere for palladium (for use in catalytic converters).
 
With everything said and done, the US has a new coin (or four), physical possession becomes easier to come by and palladium becomes even more known.

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Comments

  • bellbell63

    February 04, 2011

    For investment purposes, it is much easier and liquid to buy PALL, the ETF backed by physical Pd.

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