Gold and jewelry enthusiasts, even economists and investors, have been closely watching the unpredictable gold market in the past several years as it began to behave uncharacteristically erratic. But platinum, its more expensive counterpart, has been largely ignored.
Platinum has had some dramatic swings as of late – enough to make gold seem tame by comparison. Platinum, reaching a high of $2,300 an ounce in March 2008, today closed at $794.00 (October 24, 2008), losing more than 65% of its value in the space of only 7 months.
Have platinum jewelry prices followed? Not entirely. Jewelers are still hesitant about lowering platinum prices for several reasons:
- Unstable platinum prices means that platinum as a commodity could quickly increase again in price. Platinum markets sometimes see a 15-20% swing in a single day.
- Jewelers have a genuine need to make up for lost profits due to record prices in other precious metal categories, such as gold and the overall loss of sales, margins, and unprecedented challenges in the jewelry industry.
- A considerable increase in business expense and risk to jewelers over the past several years. Many manufacturers have simply closed their doors after decades of business.
Jewelers will have to see a sustained decrease in the price of platinum and other precious metals over the long term before safely lowering prices. In addition, for jewelers who stock inventory there is the added challenge of buying jewelry at the right moment—and the subsequent fear of losing the value of the jewelry if they buy high and prices fall shortly after.
Our stance at Apples of Gold Jewelry? We have tested the waters recently by lowering prices on all of our platinum wedding bands in order to meet changing market conditions. Or goal is to continue lowering prices if we see a steady decline in the platinum precious metals market.
The question now remains—where will the gold, platinum, and precious metals markets head tomorrow?
Category: Jewelry News