U.S. Mint Postpones 2022 Palladium American Eagle Reverse Proof Coin

On August 23, the U.S. Mint changed the September 8 release of the 2022 Palladium Reverse Proof Coin to “To Be Determined.” The Mint has not given a reason for the postponement. This year’s mintage will only be  7,500, the smallest palladium Proof mintage ever and 25% less than the nearest mintage. Within a few days of this article, the Mint assigned September 29, 2022, as the initial release date.

Since the Mint has not stated an official reason for the delay and very small mintage, it requires speculation. After Russia invaded Ukraine in late February, I wrote an article about palladium in early March. I predicted the 2022 Palladium American Eagle Proof coin would not be made, or it would be a small mintage. I guess even a blind squirrel finds a nut sometimes because it looks like I was right. 

I argued that Russian-origin supply chain challenges were coming while simultaneously there would be an increasing new car demand. U.S. law requires the U.S. Mint to produce coins with metals from American mines. I argued the U.S. would reallocate the limited amount of domestically produced palladium to the automobile industry. (Gasoline engines require palladium for emission components). These two opposing strains on the supply and demand teeter-totter would create a challenging situation. 

Russia is the world's primary producer of palladium. Russia produces more than 40% of the world's supply and South Africa produces about 35%. Besides the large palladium deposits in Russia and South Africa, the remaining world palladium is only found sporadically in small pockets around the globe. In 2020, the U.S. utilized 90,000 kilograms of palladium. The U.S. produced about 14,000 kilograms domestically. The U.S. imported the other 76,000 kilograms; 66% came from Russia and South Africa. The next largest source was Germany at 9%. 

South Africa and Russia are economic allies and members of the BRICS (Brazil, Russia, India, China, and South Africa). The BRICS probably represent the most significant threat to international dollar supremacy. The BRICS have been creating a commodity-backed basket of currencies to challenge the Dollar as the primary reserve currency and opened several banks in the different countries. Suppose the Russian war continues over the long term or the BRICS currency becomes a reality. In that case, South Africa would likely stop or diminish its palladium supply to the U.S. without suffering loss. China would buy all of it. 

The 2022 new car sales projection was lowered from 15.2 million to 14.4 million. The most reasonable explanation for the lowered projection is that inflation and higher interest rates moved people out of the market. The decreased expected demand may have cleared about a 5% of the expected palladium supply chain bottlenecks. The reduction isn’t much, considering 85% of palladium use is for automobiles. The reduction only represents about 4.25% of total U.S. demand.

It is hard to believe the Palladium American Eagles will be around much longer. Over the next few years, emissions standards will increase, and palladium supplies will decrease. When the general public figures out how this works, there will probably be political grumbling or attack ads if the administration "cares more about coins than the environment." 

With a few tiny changes, I present the closing argument from the previous article. 

       “Whenever the U.S. Mint discontinues the Palladium American Eagles, the small five-year collection (2017-2021) will become a highly sought piece of U.S. Mint history. These coins were produced under President Trump's appointed Mint director, David Ryder. Both investors and collectors will scramble to find all the Palladium American Eagles they can. Clever investors will move ahead of the curve. First, the clever will try to purchase all the Proof 70 series and then go after the bullion if there is a spot price or premium pullback. 

It is foreseeable that the U.S. Mint will continue having palladium supply problems, making the Palladium American Eagles even rarer. Adding some Palladium American Eagles to your portfolio may be wise.” 

Call the experts at the U.S. Gold Bureau for help. (800) 775-3504