Precious Metals

Secondary market heats up for palladium Eagle

The secondary market for 2017 American Eagle palladium bullion coins heated up well before the U.S. Mint’s offering of the coins to its authorized purchasers began at noon Eastern Time Sept. 25.

The authorized purchasers placed orders for 15,000 American Eagle 1-ounce palladium bullion coins, the nation’s first coin struck in the precious metal.

As secondary market sales began, premiums being charged were $200 to $325 above what the Mint was charging the authorized purchasers to buy the coins. Premiums for the American Eagles were also well above premiums for other palladium bullion products. 

Palladium joins American Eagle bullion family”U.S. Mint welcomes a fourth metal to the American Eagle bullion program. Also in this week’s print issue of Coin World, we teach our readers about what a “weak-fatty” gold coin is and why you don’t want one in your collection.

The spot price of palladium has climbed significantly during 2017. The closing London PM spot price for palladium per troy ounce on Jan. 3 was $706; on Sept. 25, it was $917.

Even before sales of the American Eagle palladium bullion coins from the Mint opened, one of the Mint’s authorized purchasers, APMEX, was already advertising examples online of Professional Coin Grading Service graded Mint State 70 First Strike coins at prices starting at $1,245 per coin, roughly $325 over the spot price.

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Sellers on eBay recorded multiple completed presale transactions for the coins, including one deal for $3,222.40 for three coins; another transaction for $2,149.98 for two coins not graded by a grading service; the sale for $1,093.89 of a single PCGS MS-69 coin with a First Strike label; and the sale at $1,109 of a single coin in a Numismatic Guaranty Corp. MS-69 Early Release slab.

Sellers on eBay also offered a number of active auctions of the bullion coin with Buy It Now options ranging from the offer of a single coin to offers featuring as many as 20 coins.

Authorized purchasers

Mint officials said these nine authorized purchasers expressed interest in purchasing quantities of the American Eagle palladium bullion coins, which were sold by allocation:

??A-Mark Precious Metals Inc.

??Dillon Gage Inc.

??American Precious Metals Exchange (APMEX)

??Fidelitrade Inc.

??CNT Inc.

??Manfra, Tordella & Brookes Inc. (MTB)

??Jack Hunt Coin Broker

??Scotia Mocatta

??Bayerische Landesbank (BayernLB)

U.S. Mint officials declined to disclose how many of the 2017 American Eagle palladium bullion coins would be struck (all are being struck at the Philadelphia Mint) and made available for acquisition by the authorized purchasers. Officials said the Mint only reports sales for the coins, not total mintage levels for the current year’s bullion programs.

The authorizing legislation, Public Law 119-94, empowers the Treasury secretary to issue the American Eagle palladium bullion coin in quantities deemed sufficient to meet demand. 

The Mint does not sell its bullion coins to the public. Instead, it sells the bullion coins through a network of authorized purchasers, who buy the bullion coins from the Mint at prices based on the closing London PM spot price of the respective precious metal per troy ounce plus a premium. The authorized purchasers may then sell the coins to the public, other dealers and investors at a markup.

The premium for the American Eagle palladium bullion coin is 6.25 percent of the closing spot price.

As mandated by the law, the obverse design of the palladium coin is an adaptation of sculptor Adolph A. Weinman’s Winged Liberty Head design employed on the dime beginning in 1916. The mandated reverse design replicates Weinman’s eagle design from reverse of the American Institute of Architects gold medal first awarded in 1907.

In developing the coin, the United States Mint was able to use the original reverse plaster of the AIA gold medal.

The American Eagle .9995 fine palladium bullion coin, like all other American Eagle bullion coins, does not bear a Mint mark. 

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