Here’s an easy question to answer: which metal in India is gaining when gold imports are coming down?
Nah. It’s platinum.
So, at a time when gold imports have come down due to the Indian government’s decision to impose an import duty on gold, platinum imports have almost doubled. According to bullion dealers, platinum imports have touched 40 tons in 2013 from 18 tons in 2012.
As reported by MetalMiner, the high import duty on gold had resulted in an increase in gold smuggling in India.
The platinum sales were largely driven by retail jewelry sales, although platinum as an investment product has not gathered much momentum in India. According to a report in The Economic Times, it was also the rising gold prices, because of the supply crunch, that had pushed up silver and platinum. Quoting Prithviraj Kothari, vice-president of the Bombay Bullion Association, the report said platinum prices went down by US $200 per troy ounce in 2013 compared to gold, which had made this precious metal popular among aspiring young Indians.
Recent statistics released by the Gems and Jewelry Export Promotion Council (GJEPC) said imports of platinum had surged over 140 percent during January 2014. The imports during the month totaled about US $1.51 million.
What was even more interesting was that the demand for platinum jewelry in India had taken giant strides with men. Indian men ages 25-40 were veering towards platinum jewelry, according to some Indian retailers.
An official at Orra Jewels, which caters to gold, diamond and platinum jewelry, said their stores had witnessed around 30 percent growth in platinum jewelry sales across the country, and around 40 percent growth in the men’s ring category.
This trend was also noticed during Valentine’s Day celebrations, where platinum and diamond jewelry pieces reportedly outpaced sales of flowers and branded apparel, according to some local media reports.
According to the Platinum Guild International, at the retail end, platinum jewelry demand had grown by 30 percent in 2013, with the metal expected to maintain the rally this year as well.
The supply crunch in gold had pushed up the premium on gold, making the yellow metal costlier, which had not happened in the case of platinum.
The one metal that could have countered platinum’s popularity was silver, often referred to as poor man’s gold. But the Indian government, acting quickly to curb surging imports, had raised the import duty on silver to 10 percent from 6 percent, leading to a drop in silver imports.