Sky-high prices for precious metals are prompting many cash-strapped couples to switch from platinum bridal rings to more affordable white metals like white gold and palladium, according to jewelers in Hatton Garden, the diamond jewelry district of London.
Platinum has soared 50 percent this year to hit a record high of $2,290 an ounce in March, driven by strong industrial demand and power shortages in South Africa, a top producer.
Prices of platinum, used in catalytic converters of cars as well as in jewelry, are now quoted at around $2,150, but they are still up 40 percent this year.
The surge in precious metals prices, and a squeeze on incomes caused by the credit crunch and climbing food and fuel prices, are spurring changes in consumer behavior in the bridal market, according to Hatton Garden jewelers.
"People are looking for alternatives - and a good alternative to platinum at the moment is palladium," said Ercan Onguc, manager at Beverley Hills London.
The price differences between the metals are stark.
For instance, a 5 mm, or 0.2 inch, ladies' platinum wedding band retails for £923, or $1,797, almost four times the cost of a 5 mm palladium ring at £250 and a 5 mm white gold band at £263.
"There is less platinum being sold," said Kevin Reilly, manager of Classic Jewels. "People, particularly for wedding rings, have been switching to 18-carat white gold or palladium," he added.
Women, enchanted by platinum's romantic cachet, tend to still insist on platinum, especially those with the highest incomes, whereas men are more likely to compromise on cost and go for the less glamorous and less expensive palladium, jewelers say.
And though both are hard metals, platinum has the edge over palladium because it is denser. Platinum is also marketed much more vigorously than palladium.
A salesman at County Jewelers said some couples on tight budgets were opting for alternative metals to platinum so they could spend more on a larger diamond.
Well informed about the recent spike in precious metals prices, notably platinum and gold, more customers are now making inquiries about palladium and white gold bridal rings, jewelers say. However, a step down in price does not always mean a huge step down in quality. There are still many places, particularly businesses offering online shopping, that carry high quality cheap wedding rings. And so, heightened volatility in precious metals is leading jewelers to re-price their stock much more often nowadays.
A sign placed prominently in one Hatton Garden jeweler's window said: "Due to the fluctuation of metal prices, all wedding rings shown could be subject to surcharges."
Jewelry manufacturers are loathe to use less platinum in wedding rings or to hollow out designs to compensate for the rise in precious metals prices.
By: David Brough Reuters
International Herald Tribune; May 20, 2008
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