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Don’t look now but Platinum is having a moment. The exclusive, premium priced precious white metal favored by many for its exclusivity and cache has suddenly also become a budget friendly alternative! It has now been supplanted by white gold as the elite precious metal! At least pricewise. So is white gold on the way in or on the way out?
It’s hard to believe that we have arrived at a point where the spot price of gold is more than double that of platinum! And this has huge implications for jewelry. The differential in spot price has all but eliminated the price incentive to go with white gold as the more affordable white precious metal, which it has been for as long as most of us can remember. What happens now in the market? What is the consumer psychology at play?
Before the run-up in the price of gold, platinum involved a significant premium for those who chose it for its properties and cache. But today that premium has all but been eliminated. In fact, it has been inverted in many cases! Fine jewelry pieces in gold alloys may now cost more than the same pieces in platinum. Will consumers clamor for the relative affordability of platinum, or will the premium price of gold give it the exclusivity and cache that used to put platinum in a league of its own?
Though the spot price of gold is double that of platinum there are two reasons why the price of a finished piece of gold jewelry may still be comparable to the cost in platinum. First, platinum is used in almost pure form in jewelry (90-95% pure), whereas purity for gold alloys in fine jewelry are typically from a little over half (58% for 14K) to three quarters (75% for 18K). Secondly, because of the weight of platinum and the fact that it is used in almost pure form, the same piece made in platinum require more of the precious metal than one made in a gold alloy.
Using very round numbers we can see the cost dynamic:
At 1000/oz for platinum, a 6 gram piece (28 gr/oz) of Plat 950 jewelry contains over $200 dollars worth of platinum. At 2000/oz for gold, a 6 gram piece of 18K contains over $300 worth of gold.
Moderating this differential somewhat is the fact that platinum is denser and heavier than 18K gold alloys so the same piece of jewelry would be lighter (and therefore less costly) in gold. And the same piece made in 14K would be closer still to the price of the platinum piece. *At the time of this writing gold is actually trending upwards of $2500 per ounce.
Superior Properties – Another Reason for Platinum to Shine
In addition to the exclusivity and cache of platinum, making it the longstanding luxury among luxuries for many jewelry shoppers, the properties of the metal are also demonstrably superior to those of white gold alloys. First, platinum is a naturally white metal that does not require rhodium plating to achieve a bright white luster. White gold alloys are “off white” because of the high percentage of yellow gold they contain, even when mixed with white metals like nickel, silver, and palladium . In order to match the natural luster of platinum, white gold alloys must be rhodium plated (rhodium is a platinum group metal). But that plating can eventually wear off revealing the off-white color of the alloy, requiring it to be replated. Secondly, platinum is a “sticky” metal, meaning that it does not wear away. When platinum is scratched a small amount of metal is pushed leaving a very small groove, but the metal from the groove is still part of the piece and can be polished back into place with negligible loss. When a gold alloy is polished a small amount a metal is lost. Prongs on a gold alloy wear over time and eventually need to be re-tipped or rebuilt entirely. Platinum items can be damaged by wear and tear, but the metal it is made from remains intact.
So, with everything platinum has going for it, why are consumers seemingly stuck on white gold? Is it just a case of ‘old habits die hard’ or is there something else going on?
Yellow Gold is Rockin’!
Possibly adding credence to the theory that the high price of gold is making people want it more, yellow gold jewelry seems to be taking off. We are seeing a major increase in the number of pieces sold in yellow gold this year vs last year to date. This could also just be a reflection of fashion trends in terms of color choice, but there also might be a connection between the “richness” of yellow gold in terms of color and its richness in price, making it the new elite and exclusive choice in precious metal. And there is no mistaking yellow gold for the "cheaper" metal platinum! (LOL)
Is Low Karat Gold in Our Future?
In the past, and in some markets today, lower karat gold jewelry has been very popular. In the US 10 karat gold has for decades been considered the lowest purity appropriate for fine jewelry, owing largely to an FTC ruling that prohibited sellers from promoting any item as “gold” that did not contain at least 41.7% pure gold (10K). And it was a popular standard in the American market historically until the emergence of 14k as the most popular gold alloy in more recent times. Even lower karat purities are considered appropriate for fine jewelry in other countries. The minimum standard in the UK is 9K.
But in a recent ruling in 2018 the FTC removed the prohibition against selling lower purity gold alloys as “gold”, though they require prominent disclosure of the actual percent of gold in the piece. This favorable ruling resulted in the emergence of gold jewelry products as low as 1K – one karat gold – 1/24th pure (about 4%)!
It would not be surprising, considering the high price of gold today combined with the economic anxiety of a lot of young consumers, if lower karat gold products once again dominate the commercial markets in the US. New technologies have created new alloys that have better properties for durability, malleability and even color.
So many questions - What do YOU all think?
Don’t look now but Platinum is having a moment. The exclusive, premium priced precious white metal favored by many for its exclusivity and cache has suddenly also become a budget friendly alternative! It has now been supplanted by white gold as the elite precious metal! At least pricewise. So is white gold on the way in or on the way out?
It’s hard to believe that we have arrived at a point where the spot price of gold is more than double that of platinum! And this has huge implications for jewelry. The differential in spot price has all but eliminated the price incentive to go with white gold as the more affordable white precious metal, which it has been for as long as most of us can remember. What happens now in the market? What is the consumer psychology at play?
Before the run-up in the price of gold, platinum involved a significant premium for those who chose it for its properties and cache. But today that premium has all but been eliminated. In fact, it has been inverted in many cases! Fine jewelry pieces in gold alloys may now cost more than the same pieces in platinum. Will consumers clamor for the relative affordability of platinum, or will the premium price of gold give it the exclusivity and cache that used to put platinum in a league of its own?
Though the spot price of gold is double that of platinum there are two reasons why the price of a finished piece of gold jewelry may still be comparable to the cost in platinum. First, platinum is used in almost pure form in jewelry (90-95% pure), whereas purity for gold alloys in fine jewelry are typically from a little over half (58% for 14K) to three quarters (75% for 18K). Secondly, because of the weight of platinum and the fact that it is used in almost pure form, the same piece made in platinum require more of the precious metal than one made in a gold alloy.
Using very round numbers we can see the cost dynamic:
At 1000/oz for platinum, a 6 gram piece (28 gr/oz) of Plat 950 jewelry contains over $200 dollars worth of platinum. At 2000/oz for gold, a 6 gram piece of 18K contains over $300 worth of gold.
Moderating this differential somewhat is the fact that platinum is denser and heavier than 18K gold alloys so the same piece of jewelry would be lighter (and therefore less costly) in gold. And the same piece made in 14K would be closer still to the price of the platinum piece. *At the time of this writing gold is actually trending upwards of $2500 per ounce.
Superior Properties – Another Reason for Platinum to Shine
In addition to the exclusivity and cache of platinum, making it the longstanding luxury among luxuries for many jewelry shoppers, the properties of the metal are also demonstrably superior to those of white gold alloys. First, platinum is a naturally white metal that does not require rhodium plating to achieve a bright white luster. White gold alloys are “off white” because of the high percentage of yellow gold they contain, even when mixed with white metals like nickel, silver, and palladium . In order to match the natural luster of platinum, white gold alloys must be rhodium plated (rhodium is a platinum group metal). But that plating can eventually wear off revealing the off-white color of the alloy, requiring it to be replated. Secondly, platinum is a “sticky” metal, meaning that it does not wear away. When platinum is scratched a small amount of metal is pushed leaving a very small groove, but the metal from the groove is still part of the piece and can be polished back into place with negligible loss. When a gold alloy is polished a small amount a metal is lost. Prongs on a gold alloy wear over time and eventually need to be re-tipped or rebuilt entirely. Platinum items can be damaged by wear and tear, but the metal it is made from remains intact.
So, with everything platinum has going for it, why are consumers seemingly stuck on white gold? Is it just a case of ‘old habits die hard’ or is there something else going on?
Yellow Gold is Rockin’!
Possibly adding credence to the theory that the high price of gold is making people want it more, yellow gold jewelry seems to be taking off. We are seeing a major increase in the number of pieces sold in yellow gold this year vs last year to date. This could also just be a reflection of fashion trends in terms of color choice, but there also might be a connection between the “richness” of yellow gold in terms of color and its richness in price, making it the new elite and exclusive choice in precious metal. And there is no mistaking yellow gold for the "cheaper" metal platinum! (LOL)
Is Low Karat Gold in Our Future?
In the past, and in some markets today, lower karat gold jewelry has been very popular. In the US 10 karat gold has for decades been considered the lowest purity appropriate for fine jewelry, owing largely to an FTC ruling that prohibited sellers from promoting any item as “gold” that did not contain at least 41.7% pure gold (10K). And it was a popular standard in the American market historically until the emergence of 14k as the most popular gold alloy in more recent times. Even lower karat purities are considered appropriate for fine jewelry in other countries. The minimum standard in the UK is 9K.
But in a recent ruling in 2018 the FTC removed the prohibition against selling lower purity gold alloys as “gold”, though they require prominent disclosure of the actual percent of gold in the piece. This favorable ruling resulted in the emergence of gold jewelry products as low as 1K – one karat gold – 1/24th pure (about 4%)!
It would not be surprising, considering the high price of gold today combined with the economic anxiety of a lot of young consumers, if lower karat gold products once again dominate the commercial markets in the US. New technologies have created new alloys that have better properties for durability, malleability and even color.
So many questions - What do YOU all think?
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