By Michelle Higgins
Platinum, which has overtaken gold as the material of choice for wedding
rings, currently trades at about $915 an ounce. That's almost three times as
much as it cost five years ago and more than twice the price of gold. Even
though metals prices slumped yesterday, platinum prices still remain close
to a 24-year high.
Jewelers across the country say mounting prices are forcing them to raise
the price of platinum wedding bands by 20% to 50% from a year ago. A plain
woman's band can now cost anywhere from $300 to $800, depending on the size
and weight of the ring. Men's rings, which are usually heavier, can cost
$900 to $2,000. Similar price increases extend to other jewelry that uses
platinum, from drop earrings to decorative brooches to high-end watches.
New York jewelry designer Scott Kay says he has had to raise his prices
twice over the past two years because of the skyrocketing cost of platinum.
But even though his high-end jewelry costs about 20% to 30% more, demand has
not fallen off, he says.
One reason behind the price hikes: In a time of global uncertainty,
investors rush to the commodities markets, especially to hedge against the
weak dollar. Over the past five years global demand for platinum has
outstripped supply, according to Johnson Matthey Inc., a precious-metals
refiner. Last year demand reached about 6.59 million ounces -- compared with
a supply of about 6.11 million ounces.
Platinum is prized because of its scarcity -- it's rarer than gold and most
of it is mined in only two countries, South Africa and Russia. Platinum is
known for its strength, heft and distinct white luster.
Although jewelry accounts for about half of the global platinum market,
there's also increasing demand for industrial platinum. The metal has long
been a critical component in emissions-reducing catalytic converters and in
chemical and oil-refining catalysts. Indeed, automotive catalysts account
for about 29% of global platinum demand while chemical and oil-refining
catalysts take 13%, according to the New York Mercantile Exchange. Platinum
is also used in the computer industry.
At the same time, demand for platinum jewelry is soaring. According to a
recent survey by TheKnot.com, a wedding-planning Web site, 38% of brides
prefer platinum for an engagement ring compared with 24% who favor gold.
Another 37% choose white gold -- an alloy made of gold and white metals such
as silver or palladium -- which resembles platinum but costs about half the
price.
Item Jewelry designer Current price Price one year ago Diamond drop
earrings Scott Kay Platinum $19,080 $18,500 Embrace necklace Novell
Design Studio $1,395 $1,095 Icon necklace Novell Design Studio $2,295
$1,800 Musica ring Emanuela Duca $5,000* $4,000* 6mm wedding bands
Scott Kay Platinum $1,180 men's, $1,050 women's $1,100 men's, $970 women's
Twist ring Emanuela Duca $6,000* $5,000*
*Plus cost of stone
"The age group that's buying platinum now -- 25-year-olds becoming engaged
-- grew up with silver and aren't about to wear yellow gold every day," says
Amanda Berg, a spokeswoman for the Jewelry Information Center, a non-profit
trade association that represents the fine jewelry and watch industry. "It's
an anti-gold generation," she says.
Platinum is also popular in the hip-hop world, which is influential in terms
of setting fashion trends. Old-school rap stars like Run-DMC wore thick gold
chains. But the new bling-bling is platinum. Artists like P. Diddy and Missy
Elliott have sported platinum pinkie rings and necklaces. Rap mogul Percy
Miller, better known as Master P, wears a $125,000 platinum and diamond
pendant that flashes his record label logo, The New No Limit.
Platinum jewelry first became fashionable in the early 1900s. The U.S.
government banned its use in jewelry during World War II. Then, in the early
1990s, jewelry designers and an aggressive marketing campaign by Platinum
Guild International, the industry's trade group, helped make it a mass craze
by targeting young brides and grooms.
But some consumers -- especially grooms -- resist the idea of paying more
for wedding rings. As a result, some couples will choose a platinum wedding
band for the woman to match her engagement ring, while the groom chooses a
white-gold ring.
There are other options for the price-conscious. Because platinum is so
durable, savvy shoppers can often find quality pieces at huge discounts by
looking for older pieces in antique stores, pawnshops and estate sales.
"Half of weddings end up in divorce," says Alan Fields, co-author of "Bridal
Bargains." "Guess where the platinum wedding rings end up."
Some online discounters offer rings at lower prices because they often have
less overhead than fully staffed jewelry stores and are willing to work at
lower margins. But watch out for unusually low prices, warns Fred Cuellar,
an expert on wedding jewelry and author of "How to Buy a Diamond." He says
such rings likely weigh less because they have air mixed in with the
platinum. If that's the case, he says, "you're buying a piece of Swiss
cheese." |
