No love for platinum despite price fall
Platinum demand has not picked up in India even after a price fall and the spurt in gold prices have made the yellow metal about 10% dearer. Retailers are finding it difficult to offload their stock of platinum jewellery while investors have turned bullish on gold owing to the increase in prices over the past one month. “There is demand for platinum love bands and chains but not so for wedding collection. It is our marketing strategy that has been able to push platinum products rather than price point,” said Rajiv Popley, director of Mumbai-based Popley & Sons.
The retailers who had built up an inventory of platinum jewellery in anticipation of a boost to sales in the event of a price fall are not finding enough takers. Suvankar Sen, managing director of Senco Gold & Diamonds said: “We had created a good stock of platinum jewellery but purchases have not gone up. There is very little awareness among people about the drop in prices in platinum in recent times.”
Platinum prices have fallen to about ` 27,000 per 10 gm from around ` 34,000 per 10 gm a year ago.
“Platinum prices are unlikely to go up immediately as the industrial demand for the noble metal has dwindled. If the Chinese economy does not look up, the price of platinum will fall further,” said T Gnanasekar, director at Commtrendz Research.
Platinum is used as an autocatalyst mainly in diesel cars, laboratory equipment, electrodes, dentistry equipment and jewellery. Automobile sales have fallen globally, which is the main factor behind the drop in prices, said Gnanasekar, while the supply of the metal has not been affected.
In 2014, a strike by mine workers in South Africa, which accounts for 70% of the global mine output, hit platinum supplies. But supplies recovered in 2015 and the trend is continuing this year.
Gold, on the other hand, is attracting investors as a safe bet at a time when both stock markets and crude oil are on the slide. According to analysts, gold prices may increase to $1,300 per ounce from about $1,226 per troy ounce at present amid concerns over a glut of oil supplies and slower Chinese growth.