Is Al2O3 (aluminum oxide) diamagnetic or paramagnetic?
Actually the Lenz effect doesn't rely on paramagnetism to sort metallic objects from nonmetallic. See for example this video, where the moving magnets actually impel the nonferrous metals, permitting separation from nonmetallic components. If you take a strong magnet, like the NdFeB magnets you can get at the hardware store or even the Dollar Store, and move it rapidly over the bottom surface of an aluminum frying pan without it touching the surface you can actually feel the force between the two. This dynamic force (dynamic in that you can't feel the force between pan and magnet if they aren't moving relative to each other unless the pan is actually iron) is sufficient to impart more momentum to the metal waste in the video above and so achieve separation.
Looking at this table we can see that $\text{Al}_2\text{O}_3$ is in fact diamagnetic with $\chi_{\text{m}}=-37\times10^{-6}\text{cm}^{3}/\text{mol}$ and $\text{Pd}$ is paramagnetic with $\chi_{\text{m}}=+540\times10^{-6}\text{cm}^{3}/\text{mol}$. I have a strong pyramid magnet that can pick up some of the granules from crushed Cheerios and has a visible pull on some of the lettering on U.S. currency. I suspect it could separate out Pd-coated from noncoated beads statically.