How investors decide between coins vs. bars in Platinum and Palladium

Key takeaways

• Coins have a higher premium than bars, which you might not recoup when you sell.
• Well-known coins from respected sovereign mints are the easiest bullion to sell with the best buyback prices.
• Bars are a little cheaper on average, making them more cost-efficient than coins.

Coins are more than just metal

When you buy a platinum or palladium coin, you’re not just buying the physical metal. They come with additional features and therefore command a higher premium over the spot price of the metal itself when compared to buying the equivalent weight in bars.

The added value of coins

So what comes with the higher premium? When you buy a coin, you are buying the physical beauty of that coin. If it’s a rare or historical coin, you are buying into that scarcity or historical value. Conversely, if it’s a newer coin that comes from a respected sovereign mint, you are buying the credibility and purity guarantee of that government, as well as counterfeit protection features such as microengravings.

Coin and bar premiums vary

The exact premium you’ll pay depends on the specific coin and the specific bar you compare. Reputable bullion dealers can help you decide which type of coin to buy.

Bars are just metal

Bars tend to be more utilitarian than coins. Beautiful designs and anti-counterfeiting features are (usually) minimal. There’s no historical value. Bars are produced to demand, so there is usually no “limited edition” artificial scarcity. When you buy a platinum or palladium bar from a reputable supplier, you are usually buying the metal itself and nothing more.

Bars offer the lowest entry price

Because of their simplicity, bars offer the lowest entry price to investing on average, making them more cost-efficient than coins when you want to put as much of your money as possible into the metal itself. However, depending on which coins and bars you’re interested in, the price difference may be very small.

Aftermarket bars are even cheaper

Generic bars from the secondary market can be even cheaper than other bars, but if you are new to precious metals trading, it will be safer to stick to newly issued bars (or coins) sold through reputable dealers.

Some bars are premium

Bar manufacturers do issue special designs sometimes. These bars behave more like coins in that they have a higher premium and a higher potential for numismatic appreciation.

If you’re going to choose coins…

As a basic rule of thumb, platinum and palladium bars from reputable manufacturers are a good default choice for anyone looking to invest in these metals with minimal hassle and maximal efficiency. They also have identical tax implications to coins when you sell. 

However, some considerations might cause coins to make more (or less) sense.

Higher Liquidity for Certain Coins, Lower for Others

The most recognizable and respected coins, like American Eagles, are very easy to sell and command the best buyback prices of any bullion type—usually in the mid-to-high 90% range relative to the spot price. That’s because these coins are highly recognizable and have strong market demand, making them highly liquid and thus easy to trade.

However, more obscure coins, or historical coins, may not be as easy to sell, and their buyback price may be considerably lower.

More appealing for small investors and newcomers

Coins arguably offer a better value proposition for smaller investments and newcomers to the stacking world. High-reputation coins like American Eagles offer strong anti-counterfeiting protections, and you know you can sell them fast if you need to. 

Many people who stack will tell you about how pleasant it is to physically hold these beautiful coins in your hand and admire their weight and beauty. They are something special, and that psychological reward of ownership can be its own form of value apart from the monetary value.

Higher potential for numismatic appreciation

Coins have a better chance than bars for numismatic appreciation over time, where a coin gains value above and beyond the price of its metal. However, this consideration isn’t something that matters to most investors, as the likelihood is small and the timeframe is usually very long. But for investors who take an interest in numismatics, it does give coins some added appeal.