THE surge in the price of platinum – which posted its biggest monthly gain in November since 2008 – has been put down to renewed appetite among consumers who prefer the metal to its more expensive rival, gold.
“We have observed that Covid has resulted in a re-evaluation of love gifting,” Trevor Raymond, director of research at the World Platinum Investment Council (WPIC) told Bloomberg News. “Platinum has been very strongly associated with love gifting, globally and in China,” he said.
The WPIC said in its third quarter report in November that the platinum market would record another deficit in 2020, partly owing to a recovery in jewellery sales in China. In addition, 2021 would also represent the continued growth of the China market.
Platinum jewellery sales had fallen for seven consecutive years in China. Looking to 2021, global jewellery demand is forecast to gain 13% – some 246,000 ounces – with all regions seeing double-digit growth, said the WPIC.
“Platinum is more competitive,” Michael Xue, chairman of Shenzhen Bofook Jewellery, told Bloomberg News. “Gold prices have increased way too much since the pandemic.” Bofook said its platinum jewellery sales jumped 20% in the third quarter from a year earlier.
Platinum has almost doubled from a mid-March low, with a 25% surge since the beginning of November. But at $1,060 an ounce, it’s still much less pricey than gold, which was trading above $1,800/oz, said the newswire.
“If a person has more disposable income and is re-evaluating life, they’re more likely to spend it on love gifting with platinum,” the WPIC’s Raymond said. Platinum being so much cheaper than gold or palladium “doesn’t make sense,” he said.
