Cheap platinum back in vogue as Chinese buyers tap cash hoards

Hong Kong

EVEN before the release of the next James Bond film - No Time to Die - Swiss watchmaker Omega is offering a platinum-gold version of the Seamaster Diver 300M that actor Daniel Craig wears when playing 007.

The 51,700 Swiss franc (S$77,380) time piece - made 95 per cent from platinum - underlines a renaissance in demand for the silvery-white metal. Omega isn't the only luxury goods maker to note the trend, with interest in high-end watches helping to almost double platinum-jewellery demand in Europe in the third quarter from the preceding three months.

That's helping platinum to make a comeback, after languishing behind gold and palladium for most of the year: its relative value is part of its appeal. Platinum posted its biggest monthly gain in November since 2008 amid a revival in investor buying. Jewellery purchases are being driven by demand in China, where wealthy consumers are starting to make emotional purchases with cash hoarded during the pandemic.

"We have observed that Covid has resulted in a re-evaluation of love gifting," said Trevor Raymond, director of research at the World Platinum Investment Council (WPIC). "Platinum has been very strongly associated with love gifting, globally and in China."

The WPIC expects China's platinum jewellery consumption to rise by 13 per cent next year, the first increase since 2013 and climbing above sales both this year and in 2019. The widening price differential with gold over most of this year has also spurred buying.

"Platinum is more competitive," said Michael Xue, chairman of Shenzhen Bofook Jewellery Co, a Chinese jewellery maker that specialises in working with the metal. "Gold prices have increased way too much since the pandemic."

Bofook said its platinum jewellery sales jumped 20 per cent in the third quarter from a year earlier.

Now prices are rising too. Platinum has almost doubled from a mid-March low, with a 25 per cent surge since the beginning of November. But at US$1,060 an ounce, it's still much less pricey than gold, which was trading above US$1,800. BLOOMBERG