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Sowmya Sundar

IT LOOKS like steel yet is three times as expensive as gold. It may not have the sentimentality of gold or the aura of diamonds but it shines in the fashion sweepstakes. Its rarity confers on it an air of exclusivity. Welcome to the world of platinum.

Behind the stiff price

A gram of platinum costs Rs 1,400-1,500. The scarcity of the metal makes it more expensive than gold. It is also more difficult to process — platinum has a higher density and is harder to work on.

According to the Platinum Guild International (PGI — an international organisation engaged in providing information and trade resources to jewellery manufacturers, retailers and consumers), if all the platinum in the world were poured into an Olympic swimming pool, it would hardly come ankle-high. In contrast, all the gold in the world would fill three such pools.

Platinum is also used in several industrial applications, especially in the auto sector for pollution control purposes. At the global level, the demand for platinum still exceeds supply. Platinum has become 1.5 times costlier over the past 10 years and the prices are less volatile compared to gold. Gold prices are subject to many extraneous influences such as central bank sales, currency movements and speculative activity. Platinum, on the other hand, trades like any other commodity and its price is not influenced by extraneous factors.

A fine metal for jewellery

Platinum jewellery weigh at least 30 per cent more than that made out of gold, making them more durable. Another facet is its stretchability. A gram of platinum can be drawn into a two-km wire. Platinum would be the designer's choice metal as it is best suited for intricate and sleek designs. Platinum has to be melted at high temperatures, before it is worked on. Hence, the design and manufacturing costs for platinum jewellery are higher.

Purity and authenticity

In India, Platinum jewellery is marketed and promoted by PGI. Most retailers source and manufacture jewellery authorised and hallmarked (hallmark is a stamped symbol on gold/silver objects that guarantees that the metal conforms to certain quality standards) by PGI. The PGI symbol is embossed on every piece of jewellery sold and manufactured by its members. Look for the symbol before buying.

As you would look for the "916" standard of purity in gold jewellery (22 carat gold is 91.6 per cent pure), you should look for the "900" standard in platinum jewellery (90 per cent pure). The highest level of purity is `950' or 95 per cent.

Pricing lacks transparency

When you buy a piece of gold jewellery, you usually buy it by weight. That is, the cost of the piece is based on the rate per gram on the date of purchase, with elements, such as making charges and wastage, added. But when you buy platinum jewellery, the break up of the price component is not available. Neither is it linked to the market price of the metal on a day-to-day basis. Every piece of platinum jewellery sold has a price tag and is sold on a piece-rate basis. The price includes the metal price and making charges. The retailer may not display platinum prices as he does for gold. However, this does not mean that as a buyer, you are not affected by the international price movements. When there is a sharp spike in the international prices, the retailers may raise the price of jewellery, though a dip in platinum prices may not necessarily be passed on. The pricing of platinum is not as transparent as in gold. An organised transparent market for platinum is yet to evolve in India. Platinum can be imported into India directly from suppliers of platinum or sourced through banks or through refiners in the country. Platinum is not available to retail buyers in the form of bars or coins as in the case of gold.

Recycling is possible

Like gold, platinum can be recycled and redesigned like gold. The recovery and refinement requires greater skill. Generally, the wastage is marginally higher in the manufacturing process for platinum jewellery compared to gold given the nature of the metal and the tough manufacturing process. The rate of recovery also depends on the type of jewellery and the process of making the ornament. Wastage for cast jewellery is lower than that for handcrafted pieces, as the former involves standard process and offers economies of scale. Handcrafted jewellery is usually intricately designed and the wastage can be higher.

Resale value

Having spent a fortune on a platinum adornment, you would like to know what it would fetch if you sell it. The resale value is usually pegged to the then prevailing international market price of platinum.

The terms for buyback differ from retailer to retailer. It, however, works on the same principle as gold. Usually, a certain percentage is deducted as wastage and making charges from the market price of the metal.

Most retailers repurchase platinum jewellery only if it is sold from their outlet. You have to show your quality assurance card that carries the details of the jewellery when selling, as it is a proof of authenticity.

With platinum becoming popular over time, retailers may come up with friendlier and transparent terms for buy back.

Usually, the resale value will be lower than the purchase price unless the price of the metal appreciates significantly. In India, gold is largely viewed as an investment avenue. However, platinum is viewed as a style statement.

Wear platinum if your wallet allows you to do so.

Checklist for buyers

ENSURE the following before you buy platinum:

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