Seven years in the making, the American Palladium Eagle has finally been launched by the U.S. Mint.
On September 18, the Mint announced it would begin taking orders for the coins on September 25 on an allocated basis from its network of Authorized Purchasers, who distribute the coins to other dealers and retail customers.
This coin is the first of an ongoing program of bullion coins to be complemented next year with a Proof example and possibly more Proofs later. The Palladium Eagle marks the first major expansion of the American Eagle coin program in the 20 years since the American Platinum Eagle was introduced in 1997.
The new coin takes the Mint into uncharted numismatic and precious-metal territory. First, it is made of one troy ounce of .9995 palladium, a metal whose market is much smaller than that for silver, gold, and platinum—and one that has seldom been used to issue coins.
Second, the coin is the first non-gold high-relief issue ever released from the Mint. If the coin is a hit, it may increase the likelihood of other high-relief issues, such as the silver versions many collectors have clamored for, down the road.
There has been some uncertainty about how well the new issue will sell, especially given the dismissive attitude of some coin collectors about palladium and coins made from it.
At the same time, a new Eagle series in a new metal is something that appeals to many collectors. In addition, the Mint, which reportedly produced only 15,000 coins,* said it would not offer or produce any more 2017-dated coins once the initial supply is depleted. That has also helped stimulate interest in and demand for the piece.
The Palladium Eagle was authorized by the American Palladium Eagle Bullion Coin Act of 2010 (P.L. 111-303, passed on December 14, 2010), which stipulated that the bullion coins must feature an obverse design based on celebrated American sculptor Adolph Weinman’s Winged Liberty Head design. The design features a left-facing profile of Liberty wearing a Phrygian cap with wings. It was first used on silver dimes issued in 1916, and again in 2016, on the gold centennial version of this coin.
The reverse design was required to be based on the design of Weinman’s 1907 American Institute of Architects gold medal, which shows an American eagle perched on a rock while clutching tree branches in its beak. Weinman created it in 1906, and his design has never before appeared on a coin.
While some collectors have argued that the Mint is using too many classic coin designs and needs more new ones, most have reacted very positively to the artists’ rendition of Weinman’s work. Moreover, the design is in keeping with the use of classic coin designs on other types of Eagle coins.
The legislation also included provisions that the coins carry a $25 denomination, be struck in high relief on both sides, not carry a mintmark, and not be issued at the West Point Mint except for the Proof versions—which would be issued at the discretion of the Treasury secretary.
Coin Update sponsor APMEX is taking preorders for raw and graded 2017 American Eagle palladium bullion coins.
There was also a requirement that a feasibility study be conducted to assess the market outlook for the coins. That study, performed in 2013 by the CPM Group, estimated that the bullion coin would sell about 100,000 pieces but then decline after the first year. However, the Proof coins were assessed to have a potentially stronger market.
The reasons for caution with the bullion version were related to the lesser acceptance of palladium and palladium coins within the marketplace, as well as the sales track record of palladium coins made by other mints—most notably those of the Royal Canadian Mint—which declined over time. The U.S. Mint has worked with its Canadian counterpart while producing the palladium coin because of the latter’s experience in this area.
The 2010 legislation’s sponsor was Dennis Rehberg, who represented Montana, the state where the only major U.S. producer of palladium (Stillwater Mining) is located. In many ways, the program was designed to support this company by creating a market for a palladium coin.
However, the CPM study concluded that “such a program would most likely not be possible to undertake profitably.” That seemed to seal the fate of the palladium coin program.
Two years ago, Rep. Bill Huizenga (R-Michigan) revived the palladium coin program in legislation that passed Congress and was signed into law in December 2015. The new legislation, the curiously named Bullion and Collectible Coin Production Efficiency and Cost Savings Act, ostensibly allowed the Mint to produce silver coins at a fineness greater than 90%, but inserted language reviving the palladium coin program, thus obligating the Mint to work on producing the coins.
In 2016, the Mint began developing a supply chain of vendors who could supply the planchets needed for the palladium coins that met the Mint’s specifications.
Stillwater Mining, based in Billings, Montana, is the sole active U.S.-based palladium producer, and it was recently acquired by South Africa–based Sibanye Gold Limited. Sibanye Gold Limited purchased Stillwater on May 4 for $2.2 billion, as reported in Coin World by Paul Giles on September 18. The company is now known as Sibanye-Stillwater Limited.
The Coin World story also reported that the Mint obtained the planchets for the palladium coins not from Stillwater, but from Swiss-based PAMP. It is not clear whether that was because Stillwater could not provide the necessary planchets or some other reason.
Ed Reiter, the longtime editor of COINage magazine who passed away recently, wrote a scathing editorial in his magazine after the 2015 legislation passed, called “Playing Politics with Palladium.” Reiter stated that for years Stillwater had been seeking someone to replace General Motors, which stopped purchasing the metal from the company and began obtaining it from a foreign producer.
Reiter also explained that the 2015 legislation that revived the palladium program, which directs the Treasury Secretary to mint the coins without regard to the market-feasibility study’s conclusions, uses what he calls “legalistic legerdemain” to do this without actually using the word “palladium.”
Given this background, it is surprising, to say the least, that the planchets are now from PAMP. The legislation that authorized the program explains that if palladium mined in the United States is not economically feasible to purchase, or is not available in the quantities required, then it can be sourced elsewhere. However, it is not clear which one of those factors is the reason the planchets were sourced from Switzerland.
Other factors that will impact sales of the coin are the premium over its melt value and the 16-year high for palladium itself, which has been in the $900-plus range recently.
Palladium’s rise this year is attributed to both speculative demand and increased industrial demand—mainly for use in catalytic converters. Still, electric cars are expected to be much more prevalent in the future, especially overseas, which could result in a serious decline in demand for palladium at some point.
The Authorized Purchasers pay the Mint a 6.25% premium over spot, and then coin sellers add their profit margin to the coin, which results in a price that is $100 to $200 over the melt value depending on where and how it was purchased. Many potential buyers have said they like the coin’s design and would get one if the spot price or premium were lower.
For a range of other perspectives on the Palladium Eagle, I turned to experts from both within and outside the coin industry.
Ian Russell, president of Great Collections, said: “I expect moderate demand for the issue—and I am very keen to see the quality and whether coins will grade 70 with this first issue. I’ve seen less interest in platinum U.S. coins lately, so while it’s a new issue in a different metal, it might be held back a little due to less interest in the sister platinum metal.”
Collectors will undoubtedly be eager to see the population-report numbers at PCGS and NGC in the coming weeks to see what the ratio of MS-70 to MS-69 coins is for this release. As it’s a new coin in a metal the Mint has never used before, it is at least possible that MS-70 coins will be less common than is the case for other, more established series. ⤵️
Examples graded MS-70 were selling briskly during the pre-order period that began when the Mint announced on September 18 that it would soon begin accepting orders for the coin from its Authorized Purchasers. For example, on September 25, Modern Coin Mart was sold out of all label options for MS-70 coins. Additionally, other retailers were sold out as well.
APMEX’s Kyle Kosinski, a product manager for many U.S. coins at the company, stressed the significance of the new coin and the appeal of MS-70 examples, noting:
While we’ve been optimistic about this coin since it was first announced, the demand from collectors has been even greater than we anticipated. I think the fact that it’s a chance for collectors to get in on the ground floor of a program of this importance is creating a lot of interest, especially with the anticipated mintage being so low. Also, if you look at historical palladium prices, it’s a really exciting metal to add to a portfolio, and the release of an American Eagle brings more attention to the metal than it has gotten in the past.
The certified coins have certainly performed very strongly so far. I think many collectors who see a strong upside to this coin in the future want to add the best examples possible to their collection, and are expecting the certified coins to hold their value well in the long term. Since this is the Mint’s first foray into palladium, no one’s really sure what to expect from the grading results—if MS-70s are less common than expected, these coins could perform exceptionally well for collectors.
Gary Marks, former member and chairman of the Citizens Coinage Advisory Committee, was on the CCAC when the original palladium coin program was proposed in 2010. He said:
The new palladium coin was initially conceived as a way to expand the demand for American-mined palladium in the United States. As such, I think the coin will see moderate success in expanding the palladium market. The coin will likely be attractive to a segment of collectors and investors for its use of beautiful classic designs and the opportunity to acquire a somewhat novel precious metal at a price point significantly below gold and platinum. If reports of the 2017 mintage being held at just 15K units are confirmed, rarity leading to healthy profit margins will also likely increase the allure for the new coin, particularly for the 2017 issue.
While I suspect the palladium coin will attract many collectors and investors, the goal to expand the palladium market for American-owned mining interests seems much less certain given the sale of the Stillwater mine to a foreign concern. Ironically, it appears foreign mines may be the biggest winner from this new American coin.
Finally, while the Congressionally mandated use of two classic American designs—Adolph Weinman’s Winged-Liberty obverse and his American Institute of Architects (AIA) medal reverse—will ensure a beautiful coin, I am disappointed that America’s best modern-day artists were not tapped to create images emblematic of Liberty in our current age. It is difficult to advance the medallic arts in modern times and to create tomorrow’s classic designs when Congress dictates designs from a century ago.
While the ultimate trajectory of this latest American Eagle is hard to discern today, there is little doubt that the American Palladium Eagle marks the start of an important new chapter in American numismatics.
* On September 25, the Mint reported sales of 15,000 coins to the Authorized Purchasers, but it is not clear if that is all that will be offered, or whether the initial supply is greater than that amount. The Mint has not, to date, announced a sell-out, which seems to suggest more coins will be sold as part of that initial supply.
Louis Golino is an award-winning numismatic journalist and writer specializing in modern U.S. and world coins. His work has appeared in Coin World, CoinWeek, The Numismatist, Numismatic News, and COINage, among other publications. His first coin-writing position was with Coin Update.
In 2015, his CoinWeek.com column, “The Coin Analyst,” received an award from the Numismatic Literary Guild for best website column. By 2017, he received an NLG award for best article in a non-numismatic publication with his “Liberty Centennial Designs,” which was published in Elemetal Direct.
Updated September 26, 2017, to restore a lost footnote.—Editor