Platinum too pricey for China's jewellery market
April 20, 2004
By Reuters
Perth - Jewellery made with 18-carat gold was becoming the adornment of China's burgeoning consumer market, replacing more expensive platinum, a gold industry lobby group said yesterday.
"Platinum prices have risen sharply this year, making gold increasingly attractive for China's new consumers," Albert Chang, the managing director of Far East for the World Gold Council, said on the sidelines of the Australian Gold Conference.
Platinum's "white metal" appearance appealed to young Chinese professionals, although sharp price increases to more than $900 (R5812) an ounce were pricing many out of the market
Of the 207.6 tons of gold consumed in China last year, all but six tons were sold in jewellery form, Chang said.
Until recently, most gold jewellery was fabricated from 24-carat gold, a more malleable grade with a higher gold content, which gave off a rougher, less polished appearance.
Now more fabricators were tooling up to make jewellery from harder 18-carat gold, Chang said.
Fabrication costs are generally higher for the harder metal.
"Eighteen-carat gold looks more refined and shiny and still costs less than platinum would," Chang said.
Gold fetches about $405 an ounce - up 43 percent since January 2002, but still less than half the price of platinum, which is used as much in making vehicle catalytic emission converters as in jewellery.
The shift to gold would help support China's gold mining sector, which last year churned out 200.6 tons of gold, making it the fourth-largest producer behind South Africa, the US and Australia, Chang said.
China has been the fastest growing economy in the world by a wide margin, averaging annual growth of 9.5 percent since 1990.
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