Many investors have purchased palladium coins and bullion as a way to diversify their precious metals portfolio. This silver-white metal, a member of the Platinum Group Metals (PGM), is rarer than gold, making it attractive to investors hoping to capitalize on its relative scarcity.
Palladium is an element that William Hyde Wollaston discovered in 1803. As a member of the PGM, it shares characteristics with platinum, rhodium, ruthenium, iridium, and osmium. Palladium is less dense than the other PGMs and has a lower melting point.
Palladium deposits are quite rare; the largest deposits are in the Transvaal Basin in South Africa and the Norilsk Complex in Russia. In North America, palladium ore is mined at the Stillwater Complex in Montana and at the Thunder Bay District in Ontario, Canada.
A Brief History of Palladium
Wollaston, who discovered both palladium and rhodium, named the element after the Pallas asteroid, which was discovered earlier that year. Palladium was found on artifacts from ancient Egyptian civilizations and was most likely mistaken for silver.
During the Spanish Conquests of South America, which were motivated in part by the large gold deposits in those countries, the Spaniards called platinum and palladium “nuisance metals” because large grains of the metals would stick to the gold ore and were very difficult to remove. In fact, the Spaniards called the metals “platina,” a derogatory word meaning “little silver.” Palladium utensils and jewelry have been recovered from this period.
Wollaston went public with his discovery in 1805; for his achievements, the Geological Society of London created the Wollaston Medal, the highest award given by the Society.
Uses of Palladium
Palladium is softer than platinum and resists oxidation and corrosion at high temperatures, making it ideal for use in catalytic converters. In fact, automobile manufacturing uses the largest share of palladium each year. Interestingly, palladium caused GM to lose more than $1 billion in 2001. The Russian palladium supplies were delayed in 2000, driving prices up to more than $1100 per troy ounce. GM, fearing a shortage, bought stockpiles at the high price. When prices normalized the following year, the company lost big.
Palladium is also used in electronics, for plating, integrated circuit boards, and capacitors. In jewelry-making, palladium is used to make white gold; it’s also alloyed with platinum to improve its working properties. The metal is also an essential component in making polyester.
Current studies show that palladium has promise in treatments for both prostate and breast cancer, and research is underway on palladium’s use in fuel cell technology.
Palladium as an Investment
As with other precious metals, palladium offers investors an opportunity to build wealth by accumulating physical assets. Russia, the world’s largest supplier of palladium, has reduced the amount of palladium it exports by 100,000 ounces in recent years, keeping more of the precious metal for domestic use. Because of its many uses in science and technology, and its relative rarity, palladium has the potential to grow in value over time.
Forms of Palladium Bullion
Palladium’s characteristics are ideally suited for coinage; although, its actual usage in general circulation is extremely limited. Tonga, a South Pacific nation, minted palladium coins in 1967 commemorating its new king. Portugal issued palladium proof coins from 1987-1990. France minted 100-franc palladium coins in 1987 and the Royal Canadian Mint has produced a Palladium version of the popular Maple Leaf bullion coin in the past, as well.
From 1989-1995, Russia issued limited palladium bullion in the form of coins called ballerinas because of the posing dancers on the obverse side of the coins. The Perth Mint in Australia issued a series of palladium bullion coins from 1995-1997 known as Emus; they suspended production of the coins in 1998 when the price of palladium doubled. In 2004, the Republic of Slovak issued a pentagon-shaped palladium coin commemorating its acceptance into the European Union.
The U.S. and China are acting to meet the growing demand for palladium as an investment vehicle. While China has printed palladium coins in the past (the “kissing panda” series is favored by collectors), the ICBC began releasing investment-grade palladium medallions in 2012. The U.S. congress instructed the U.S. Mint to conduct a palladium marketing study in 2010; most experts expect the mint to begin issuing a one-ounce palladium American Eagle coin with a face value of $25 in the near future.
Palladium coins and bars are valued by both collectors and investors. If you’re interested in this beautiful precious metal, check out our wide selection of palladium bullion investments which includes coins like the Canadian Palladium Maple Leaf and ounce sized Palladium bullion bars.