Price and future jewellery demand
It is no secret that the platinum jewellery market was experiencing headwinds prior to the global pandemic, especially in its major China market which is seeing strong competition from gold.
However, the most recent Platinum Jewellery Business Review conducted by Platinum Guild International (PGI), a worldwide marketing organisation dedicated to creating, expanding and strengthening consumer and trade markets for platinum jewellery, indicates that the relatively lower price of platinum when compared to other precious metals could well be a factor that assists with a post-COVID 19 recovery across a number of markets.
For example, in China, although the effects of COVID-19 have severely impacted overall economic growth and jewellery demand, PGI believes that manufacturers and retailers took advantage of the low platinum price to increase stock levels in anticipation of future growth and to support the development of new product lines.
PGI also anticipates that, while platinum business in the US declined in quarter one 2020, current metal prices will continue to position platinum favourably against its main rival, 18 karat white gold.
In the mature Japanese market, PGI is hopeful that, despite weaker demand in the first three months of the year, platinum jewellery might fare better during the recovery from the effects of the COVID-19 pandemic, as the platinum price remains low and consumer demand is supported by a high level of consumer affinity with the metal.
The platinum jewellery market in India suffered more than other markets as steps to reduce the impact of the pandemic caused the cancelling of important festivals and the key wedding season in quarter one. However, PGI believes that, looking ahead, the platinum jewellery market here is also well-positioned to take advantage of low metal prices, as well as benefit from possible industry consolidation.
* World Platinum Investment Council Platinum Quarterly Q1 2020, Metals Focus