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PLATINUM GROUP METALS

Platinum surges in India's investment portfolio

Platinum jewellery retailers in India are targeting consumers with high disposable income, attracting them with not just platinum jewellery items but also coins and bars as an investment tool.

Author: Shivom Seth
Posted: Monday , 25 Mar 2013

MUMBAI (Mineweb) - 

Indian consumers have a new frenzy, platinum jewellery. In a country where gold is the dominant choice for jewellery, platinum is finding more than a toehold. 

Retailers say many customers appear to be opting for platinum jewellery rather than gold products these days. Investors too are placing their wagers on platinum, following market speculation that platinum is set to rise faster than gold.

The demand for platinum as an investment instrument has been on the rise at the National Spot Exchange, headquartered in Mumbai, which sold 40 kg of platinum through its e-platinum scheme in February, as compared to 15 kg in January, this year.

Last year, platinum prices had fallen below gold as the yellow metal appreciated significantly. The consequent correction in gold prices, with platinum trading at around $1,579 per ounce, has got investors considering platinum as an instrument for investment, said Anjani Sinha, CEO of the National Stock Exchange.

He added that platinum moved up from $1,400 per ounce in August 2012 to $1,740 in February, given the supply constraints and mining related issues. Output from South Africa, which mines 72% of global supply, has also been badly impacted due to labour strikes and shaft closures. 

Leading retailers in Mumbai though like Tanishq, Kalyan Jewellers, Joyalukkas and Lagu Bandhu Motiwale among others are making merry though, and are pushing platinum jewellery in India. Special schemes were rolled out by retailers like TBZ and Manubhai Jewellers to mark International Women's day, with advertisements urging consumers to `salute the special woman' in their life. 

Though Platinum Guild International is behind the marketing campaign, with many schemes highlighting the wide variety of platinum jewellery ranges available in India, retailers insist the growing popularity and awareness among consumers is set to push platinum demand by 50% in India during the next couple of years. 

Customers’ desire for a change from the perpetual gold with higher possibility of returns on their investment is also likely to grow platinum demand in India. Platinum jewellery largely comprises personalised jewellery items such as wedding bands, chains, earrings and pendants, say retailers, with wedding bands alone constituting 50% of platinum jewellery. 

The first three quarters of 2012 were very positive for platinum jewellery, according to Vaishali Banerjee, Country Manager India, Platinum Guild International (PGI). Though it is still in the primary growth stage, she says demand is expected to grow over the next few years. The Guild is looking at an overall 40% to 50% jump in the coming season.

Many retailers in India also have launched their own initiatives with their new range and collections in platinum. Like bullion retailer Popley Jewellers, which unveiled its new season’s collection of platinum jewellery with young Bollywood actors. Two of the actors have starred in the retailer's `Platinum Day of Love' campaign.

As Rajiv Popley, Managing Director, Popley Jewellers notes, platinum as a precious metal is eternal, thus making it the perfect choice for an expression of everlasting love. 

"We have noticed a surge in platinum demand over the years. Young couples today prefer to profess their love with platinum. Many are opting for the classy white metal platinum for its inherent values and are looking at a blend of modern and traditional designs for their jewellery sets,'' he says.

PGI has been campaigning hard to bring awareness about platinum jewellery in India and has now developed the `Phase 2 of Platinum Day of Love' communication, a regular interaction programme with retailers and consumers.

Its outcome of a recent research conducted with consumers pan India shows that awareness and knowledge about platinum has grown and the desire to buy platinum is much higher. Buyers understand and now prefer to have high quality diamond jewellery set in platinum, the research shows.

Given its overall appeal, bullion traders are also offering platinum bars and coins. Popley adds that platinum coins and bars are a big hit at the Indian firm's Dubai showroom. ``We are planning to do a major show in India shortly. We are in talks with our overseas manufacturer in Switzerland for a steady supply of products,'' he added.

Bullion retailer Riddisiddhi Bullion has also entered the market with its platinum wares. Prithviraj Kothari, director, says that people prefer platinum as an investment product these days.

Analysts add that although auto catalyst and industrial demand for platinum may be flat compared to the previous years, supply constraints and investment and jewellery demand in India are set to be major price determining factors going ahead.

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10 May 2013


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