Sunday, March 13, 2016

Precious metal investing advice from a coin collector

One of my favorite things about being a coin collector, and a research nerd with an over-active imagination, is making guesses about precious metal prices and waiting to see if I was right. Sometimes it takes years. For instance, I told a co-worker of mine to buy gold when the stock market began to tank in 2008. Of course, she did not, and neither did I. However, gold nearly doubled in price by 2011. (See the graph below.)
In reality, my right/wrong record is worse than any meteorologist's. So, bare that in mind as you read further. What follows is my latest piece of guesswork.
Here goes:

Silver - 30 Years
Silver Price Graph

Gold - 30 Years
Gold Prices Graph

Platinum - 30 Years
Platinum Prices Graph

Palladium - 30 Years
Palladium Prices Graph

The graphs above illustrate precious metal prices over a thirty year period. You will notice metals' prices generally follow the same track. That is, except for palladium. In late 2000 the Russian shipments of palladium (Russia is the main exporter) slowed due to various entanglements.
U.S. car manufacturers had counted on palladium shipments because the metal is used in the production of catalytic converters. They were seriously hurting during the palladium spike which caused them to seek other options. At the same time, Russia was assuring U.S. companies that palladium shipments would soon resume a normal flow. Which, of course, they did; almost a year later!
My point is, palladium prices can be volatile and move independently of other precious metals.
Fast forward to today. The U.S. Mint is exploring producing palladium bullion coins. If they go through with the idea, and the series catches on like the Silver Eagle program has, what do you suppose will happen to the price of palladium will the increased demand?

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