The Palladium spot price is the price for one troy ounce of palladium. Palladium trades on commodity exchanges around the world with some of the largest trading volumes from the CME Group (COMEX & NYMEX) in Chicago and New York and from the Tokyo Commodity Exchange (TOCOM). CME palladium contracts are traded in 100-ounce size and the palladium spot price is the price for one troy ounce of palladium for immediate delivery (or 1/100th of a futures contract).
As with other commodities, the prices for immediate delivery of an ounce of palladium or “spot price” is actually based on futures contracts. The palladium spot prices are derived using the forward month palladium contract with the highest trading volume. While palladium futures contracts expire every month, the forward contract with the highest trading volume is not necessarily the contract nearest to expiration, therefore the palladium spot price may be calculated using a contract months away from the settlement.
Is the spot price of palladium the price I pay for a one-ounce palladium coin?
The price for a one-ounce palladium coin such as a Palladium American Eagle or a Palladium Canadian Maple Leaf is generally higher than the spot price of palladium. There are two reasons for this. First, the palladium bar delivered in a futures contract is an odd-weighted bar around 100-ounces while a purified and refined palladium coin is a minted product of that bar, thus bearing a higher price or premium over the spot price. Second, palladium contracts are dominated by ETF and speculating trading so that very little of contracts traded are actually delivered in physical form. Paper trading is not equal to the price of a minted coin or even a pure bar delivered directly to you. It is also worth noting that the American Palladium Eagle has been minted in very limited quantity and, due to high demand and limited supply, is valued well over the palladium spot price on both the buy and the sell side. Even though palladium coins do not sell at the spot price, the spot price of palladium is the basis for the daily pricing of palladium coins at most palladium bullion dealers such as Midas Gold Group.