Editorial Feature

An Introduction to Platinum Jewellery

During the past two decades, the global demand for platinum has surged. Applications using platinum are widespread in our modern, high-tech lives: Automotive uses, fuel-cell technology, electronic components, chemical and petroleum refining catalysts, dental and medical uses, to name a few. In the investor’s quest for a diversified portfolio, tangible assets such as platinum can be highly effective because of platinum’s hedge characteristics and its’ powerful growth dynamic. An excellent illustration of the increases in platinum demand can be found in the jewellery sector. Platinum jewellery has enjoyed 82% demand growth in 10 years and is the “Metal of the Millenium”.


Johnson Matthey reports that the demand for platinum jewellery worldwide has soared 82% in the last ten years. The demand for jewellery went from 1,300,0000 ozs. in 1989, to 2,370,000 ozs. for 1998. No other use area has exploded like the jewellery sector. Investors who follow the platinum market often pay the most attention to what they understand: traditional and industrial uses for platinum. These include: manufacturing of steel, gasoline, fertilizers, high-tech goods. But, the fastest, most dynamic area of platinum consumption is jewellery.

Platinum Jewellery Demand

Platinum jewellery has seen its demand grow throughout the world, despite periodic recessions and economic turmoil. In the U.S. alone, consumer demand for platinum jewellery has increased by an estimated 600% since 1990. According to Platinum Guild International, platinum jewellery is now sold in more than 15,000 retail establishments in the U.S., whereas just 10 years ago platinum jewellery was difficult to find.

Demand for platinum in jewellery expanded by 210,000 ozs. to reach 2.37 million ounces. in 1998, according to precious metals refiner Johnson Matthey. Annual growth rates for jewellery demand in the U.S. and Asia, have been in the double digits. Additionally, what is traditionally the world’s largest consumer of platinum jewellery, Japan, is showing signs of economic recovery that could push the figures to new record levels. Platinum jewellery is the metal of the “New Millennium”, and demand is expected to continue to expand at double-digit rates in key markets. The strategic jewellery capitals include: Milan, Tokyo, London, Shanghai, Los Angeles, and Frankfurt.

Why the White Wave?

Platinum is pure, sleek and modern. It continues to attract new fans worldwide: a recent international jewellery catalogue focusing entirely on platinum solicited follow - up inquiries from retailers in 75 countries. The image of platinum has evolved from “a metal used in the past” to “the metal of the new Millennium.” Young, fashion-conscious consumers are driving the market to new heights. The tidal wave for “white jewellery” has boosted international trade for platinum jewellery, which has benefited from increased exports from Italy, Germany, India, Japan, the U.S., China and Hong Kong. Smaller markets like the UK are experiencing increased demand with a focus in Western markets on wedding jewellery and in the East on necklaces, rings, pendants bracelets and earrings.

The widespread demand will help insure the longevity of this growth trend. Each major market covered in this report has its own unique attributes and reasons for expectations of future growth. With greater knowledge of these markets, investors can understand why the fundamentals for the platinum jewellery sector as a whole are powerful and should only grow stronger.

North America

The world’s largest consumer market has re-awakened to the purity and beauty of platinum jewellery. The large bridal market continues to thrive and platinum coin jewellery has a strong following in the U.S. In North America, rising retail sales of platinum jewellery stimulated an increase in domestic fabrication, with demand expanding by nearly 40% last year. U.S. jewellery makers continue to focus mainly on the bridal market. Platinum’s share of the local market for engagement rings and wedding bands ranges from 21% to 25%, up from practically nothing in 1991. Growing consumer demand for platinum accessories has been met by higher imports from countries such as Italy, Germany, India, and China. Platinum, perceived for its quality as “upmarket”, is meeting the broad market.

Zales, the world’s largest retail jewellery chain with over 1,100 outlets across North America, is now carrying platinum, introducing millions of people to platinum for the first time. Platinum is seeing increases in exposure on Cable TV as well, via the home shopping and paid advertisement venues. Jewellers of America released figures showing that in 1998 platinum jewellery sales had increased by nearly twice as much as diamond jewellery sales, and nearly 5 times as fast as gold jewellery. During that year total U.S. jewellery sales increased by 9.3%. The popularity of white metal jewellery should stimulate further growth in U.S. platinum jewellery fabrication this year.

Platinum continues to capture a rising share of the market for more expensive bridal rings and fashion accessories. Coin jewellery is a relatively new but strong growth category. Popular for years in Japan, coin jewellery incorporates .9995

pure platinum legal-tender coins / ingots in a variety of frames and bezels. While this segment is a relatively small part of overall jewellery demand, the amount of platinum used per piece is significant, typically a tenth to quarter ounce for the coin alone. The recent explosion in consumer demand for this product category has helped manufacturers place platinum coin jewellery on cable television and in many retail stores. This segment has experienced considerable activity with the 1997 launch of the Platinum American Eagle coin, which had been designed especially to hold appeal to consumers in this market. The U.S. Mint’s product catalogue, distributed to 1.4 million consumers regularly, features a variety of platinum coin jewellery.


Japan is the world’s premier platinum jewellery market, and has shown strength in even the toughest economic conditions. From high-end Tiffany pieces to every girl’s dream wedding set, platinum commands the jewellery market in Japan.

In Japan, platinum demand has been affected by further consolidation of the jewellery industry. As the economic downturn continues, an increasing squeeze on credit has forced many manufacturers and distributors to reduce inventories, and pushed others into bankruptcy. Some of the surplus stocks have been sold off at low prices. There has also been an increase in recycling, especially when yen-denominated precious metal prices are high. The picture in Japan, however has some bright spots. Although consumer demand for rings declined in 1998, retail sales of platinum accessories such as necklaces, earrings and bracelets grew by 15%. And, according to figures supplied by PGI’s office in Japan, platinum jewellery is gaining additional market share in terms of unit sales.

As platinum’s overall popularity increases, jewellery pieces that are fashion accessories are now highly sought after. Many major manufacturers have responded to this trend by expanding their ranges of platinum fashion jewellery.

Platinum coin jewellery, which has always had a following in Japan due to the popularity of the Canadian, Australian, Isle of Man and Chinese platinum coins, also saw surging interest with the launch of the Platinum American Eagle.


Demand in China is seeing exceptional growth with the emerging middle class. Lightweight, inexpensive pieces make the exclusive metal affordable for sophisticated, young Chinese women with rising incomes. China is now the second largest market for platinum jewellery after Japan with 21% of world consumption. The volume of platinum jewellery in 1998 was approximately 620,000 ounces, according to Johnson Matthey estimates, up more than 70% from 1997.

Much of this is due to advertising and promotional campaigns that have increased platinum’s popularity among young consumers. Retail sales are composed mainly of simple, lightweight rings and neckchains. The more varied and sophisticated styles have begun to widen platinum’s appeal to include women in their thirties and forties. The target market for platinum jewellery in China is white-collar, working women from 20 to 40 years old with a college education. Platinum jewellery is sold at prices ranging from $75 and up, with much of that in metal-only pieces, which puts the jewellery in an affordable range for this expanding market.

Rapid growth in Chinese consumer demand has encouraged existing retailers to hold larger stocks of platinum items. Jewellery stores in major cities across north eastern and central China are beginning to sell platinum for the first time. To meet this demand, existing manufacturers have significantly raised output. Also important for Chinese platinum jewellery demand is that it is a relatively small market in comparison to the gold jewellery market. Unlike gold, the platinum market in China is less subject to controls. Despite the sluggish economy in China, PGI Shanghai estimates the market growth for platinum jewellery will be about 30% in 1999.


Italian platinum jewellery is exported around the world. Considered to be the most beautiful jewellery in the world, Italian design concepts help put the “dolce in platinum’s vita”, from foundation bracelets and chains to chic designs catering to broader markets. The U.S. and Japan are top destinations for jewellery produced in Italy.

The Italian platinum jewellery market has been heavily bolstered by global market developments. Two-thirds of the Italian jewellery production is for export with 50% directed to the United States. The U.S. markets and emerging markets, particularly China, have motivated many major producers to venture into platinum. In Italy, “white” jewellery has begun to supplant gold jewellery, particularly among young consumers. According to PGI-Italy, many young people will only wear “white” and consider platinum “the metal of the new Millennium.” There are many new products available and while rings are the most common type of platinum jewellery purchase, pendants, a new category, have gained immediate popularity and are now second in sales.


From the “avant-garde” to classical, German platinum jewellery is valued around the world for its intelligent design and style. Germany competes with Italy in setting trends and innovation for the rest of the world. In Germany, a decline in economic growth has affected domestic sales of precious metal jewellery. However, platinum’s market share continued to increase with the introduction and promotion of new ranges of accessories by some large retailers. PGI’s office in Frankfurt confirms that trends also show that the hottest development for the past several years has been the popularity of platinum - only pieces that contain no gold at all, demonstrating once more that platinum demand is soaring.

The German platinum jewellery market is geared towards exports. Last year, consumption of platinum in the German consumer market was over 1.7 tons, while fabrication was at 3.28 tons. Growth in the U.S. and Chinese markets helped support platinum jewellery demand in Europe, with manufacturers in Germany (and Italy) expanding exports to those countries. The average price per platinum jewellery piece is DM 1,800 (about $1,000), about three times higher than the average price for gold jewellery.


The future is clear: platinum jewellery demand growth should continue, not only in Western markets but, even more importantly, in emerging markets. The platinum jewellery market has matured from regional production centres catering to local tastes to a truly international marketplace of jewellery consumers.

National Jeweller magazine reports that the growth of platinum as a category, overwhelmingly surpassed all other jewellery categories in recent years. This, in conjunction with emerging market growth, means that the demand for platinum will rise and the white tidal wave for jewellery will continue through the Millennium. Investors can benefit from this demand growth by accumulating positions in this commodity with bullion coins like the U.S. Platinum Eagle.

The investment potential for platinum bullion coins is enhanced by the ongoing expansion of platinum demand from global industry and jewellery. The remarkable resiliency of the U.S. and European economic health, coupled with the recent recovery of Asia, should reward platinum investors for the next several years.

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