It’s always important to find accurate updates on the price of palladium per ounce on an up-to-the-moment basis. This is because the spot price of palladium is changing every few seconds as the precious metal is traded. Current palladium prices are typically measured in dollars per oz. Keep in mind that the palladium price per ounce is expressed in troy ounces, not standard avoirdupois (AVP) ounces that are used in almost all other situations.
The price of palladium today is greatly influenced by the trade of palladium futures contracts. These contracts are taken to represent the future expectations for where palladium prices will move, as virtually all commodities are traded on the futures markets. The supply and demand for palladium also helps determine the price of palladium today. When supply goes down, possibly due to changes in the mining industry or more palladium getting used up in industry, this puts upward pressure on palladium prices.
The palladium spot price is the free-floating price for one troy oz of pure palladium, and is the lowest possible cost for physical palladium sold for immediate delivery. The spot price refers to the going rate for palladium at any given moment, and is thus used by traders, sellers, and palladium producers in order to appropriately price their palladium products.
Spot prices are derived mainly by supply and demand for palladium within the free market. These market forces dictate prices, as the spot price should reflect the equilibrium between how much the precious metal is being demanded (by consumers, jewelers, investors, and automobile producers) and what the available supply is. Among other factors, the trading of palladium futures on the futures market has a significant influence on the current spot price.
Spot prices for palladium are constantly changing. Throughout the trading session, the price moves up and down based on how much palladium is bought and sold. Because exchanges in Asia and abroad are open when Western markets are closed, the spot price is effectively changing 24 hours a day.
The greatest determining factors for the palladium spot price are supply and demand. All of the smaller factors affecting the spot price can be grouped under changes in supply or changes in demand. For example, increases in supply such as the opening of new palladium mines or an increase in production from existing mines will generally put downward pressure on the spot price. Changes in demand, such as growing collector interest in palladium coins, will generally influence prices higher. Perhaps the greatest source of demand for palladium is from the automobile industry, where the metal is used in catalytic converters for cars (especially diesel engines), meaning a rise or fall in automobile manufacturing can also have an effect on the palladium spot price.
Palladium spot prices are denominated in U.S. dollars. Although you can find out the price in different currencies by using exchange rates, pricing palladium in dollars makes sense because the U.S. dollar is used all over the world. This also cuts out the transaction costs of converting purchases into different currencies.
The spot price of palladium always refers to the cost of one troy ounce of the metal. The troy system of weights has its origins in antiquity, but is still used for measuring precious metals to this day. One troy ounce is equivalent to 31.1 grams, which is slightly heavier than the more common AVP ounce (28 grams).
Yes, the spot price of palladium is the same wherever you go around the globe. The spot price takes into account factors from all over the world economy, not just the United States, so it is used as a real-time benchmark across all international markets.
The spot price is the lowest possible cost for a troy ounce of palladium; it is the price which mining companies sell their freshly mined palladium for. It is the “out-of-the-ground” cost, so to speak. Therefore, all of the costs associated with fabricating or minting the palladium into a finished product must be accounted for on top of the spot price. Precious metals dealers must charge at least a small premium above the spot price, or they would not be profitable and would have to shut down operations.
No, shipping costs and markups are not incorporated into the spot price. In fact, the spot price doesn’t include the cost of refining, processing, and fabricating palladium into pure bullion, either.
The variance in prices among different palladium products is attributable to the form the metal comes in (bar, round, coin, etc.) as well as its potential collectible appeal. While more generic palladium bars will be priced very close to the spot price (i.e. their melt value), a palladium coin with legal tender status, or a limited-edition palladium bar with artistic craftsmanship, will garner higher premiums due to the specialized labor involved in their production.
Premiums will vary from item to item. The premium over spot for a palladium product is based on--but not limited to--some of the following factors: the cost of fashioning the palladium into a coin or bar; the cost of special labor for intricate, artistic representations; the shipping expenses from producer-to-distributor, from miner-to-refiner, etc.; and the potential collectible or numismatic value of a scarce item. While some of the more basic palladium products will be just a few dollars over spot, rarer palladium collectibles (usually coins) can acquire significant premiums over spot.
The bid price is the amount a dealer will pay for a given product or unit of precious metal. The ask price is how much the dealer will sell a product for. The spread between these two prices--the “dealer spread” or “bid-ask spread”--is often used as a measure of that item’s liquidity on the market.
Palladium futures contracts are agreement between two parties to exchange a specified quantity of investment-grade palladium (.995 fine and above) at a specified price on a future date (typically 3 months in the future). Because palladium futures represent an expected price for the metal at a later date, a high volume of trades in futures contracts priced above or below the current spot price can influence real-time prices higher or lower.
The NYMEX is the New York Mercantile Exchange, a commercial exchange platform where futures contracts are traded. Precious metals futures have been traded on the NYMEX since 1994, when it acquired the COMEX, a commodities exchange. The NYMEX was purchased by the Chicago Mercantile Exchange (CME) in 2008.
The COMEX is now the commodities division of the NYMEX. Commodities futures, including palladium futures, are traded daily on the COMEX. These futures contracts can have a considerable influence on the current spot price of palladium. The COMEX is also operated under the CME.
Palladium derivatives, especially exchange traded funds (ETFs), are often called “paper palladium” because they are financial products whose value is tied closely to the price of palladium, but they are merely shares in a fund. Until (or if) you take delivery of actual palladium from an ETF or similar mechanism, you only own the palladium “on paper.” Stocks in palladium mining companies may also be considered “paper palladium,” as opposed to physical, tangible palladium bullion--holding the actual metal in your hand.
Yes, mining companies can indirectly affect the palladium price. If the spot price of palladium falls too far, certain mining operations must shut down or risk losing considerable sums of money, since research and development costs are rather steep. The miner can cut production when prices are low, thus decreasing supply (or expected supply) and influencing prices higher, or create the opposite effect by ramping up production when prices are high.
Yes, because there are exchange platforms located all over the world (London, Hong Kong, Singapore, etc.), palladium and the other precious metals are traded on a constant basis, meaning price changes are always occurring.
Whether or not buying palladium is a taxable purchase depends on several factors. If a palladium product is being shipped across state lines, it is considered interstate commerce and is not taxed. If a purchase of palladium exceeds $500, there is no sales tax because this is seen as an investment. Also, if you buy a palladium coin within its issuing country, then there is no sales tax because you are buying another form of legal tender. When palladium is shipped internationally, there may be value added taxes or import duties imposed by the country where the shipment is received.
Credit card transactions are more expensive because of the merchant costs associated with processing credit card payments. Precious metals dealers operate on very thin profit margins and cannot absorb these processing fees. That’s why we offer the option to pay by bank wire, because wire transactions typically only cost a small, flat fee, and can allow you to maximize the amount of palladium your dollar will purchase.
Because spot prices are constantly fluctuating, the price of your purchase can increase or decrease up until the time it is finalized. Prior to the finalization of your order, the price of an item is subject to the market fluctuations of the spot price. For bank wire purchases, if you can provide a valid credit card to authorize 5% of the total cost of your order, the spot price will be locked in before your wired funds are received, and the 5% credit card authorization will be voided upon receipt.
Specifically, no, the face value of a palladium coin does not correspond to its actual value. In a broad sense, the monetary denomination will be higher for larger size coins and lower for small coins, but this has little bearing on the coin’s retail value. The assigned face value of a palladium bullion coin is largely symbolic, considering the intrinsic value of such a coin is typically far above its value as legal tender. The presence of a legal tender status, however, does usually add to the premium over spot for a palladium coin when compared to a generic palladium bullion product of the same weight and purity specifications.
There are numerous advantages to buying palladium online rather than at a local coin shop. Traditional “brick and mortar” dealers often encounter expensive overhead costs of maintaining their storefront location that online sellers don’t have to worry about, allowing an online dealer to pass these savings onto the consumer. Online dealers may also be able to offer a larger inventory and wider variety of products to their customers thanks to certain economies of scale. Finally, if you purchase palladium online, you’re able to shop from the convenience of your own home at any time, 24 hours a day, 7 days a week, whereas most traditional stores are only open during business hours (or less).