Platinum Likely to Outshine Gold this Akshaya Tritiya

Kolkata: Platinum may give a tough competition to gold this Akshaya Tritiya as it has become 18 per cent cheaper than the yellow metal.

Jewellers and bullion dealers said that platinum has become popular among young Indian men, who are buying platinum bracelets and chains, and that the trend of 40 per cent growth seen over the past one year may continue till Akshaya Tritiya. It is considered auspicious to buy jewellery on Akshaya Tritiya, the annual spring festival of Hindus and Jains, which falls on May 7 this year.

Traders said that demand for platinum jewellery among men grew 40 per cent year-on-year in 2018-19 while the overall platinum demand went up 25 per cent.

“Low price of platinum will drive its sales on Akshaya Tritiya this year. Indian men, particularly millennials, have developed a taste for platinum jewellery,” said Kalpanik Choksi, director of Ahmedabad based Ishwarlal Harjivandas Jewellers. On Monday, the spot price of platinum was Rs 26,730 per 10 gm while that of gold was Rs 32,650 per 10 gm. Platinum imports increased 6.41 per cent in April 2018-February 2019 from a year ago to touch Rs 418.58 crore. In February alone, imports went up 34.59 per cent to Rs 69.51 crore.

Analysts said platinum demand may remain robust this year since there is no immediate trigger for prices to move up. Platinum is used in catalytic converters in petrol cars to control pollution. The automobile industry has slowed down across the world owing to trade tensions between the United States and China. Political uncertainty owing to the possibility of a nodeal Brexit has also dented investor sentiment.

The falling price of palladium is also affecting platinum price as they belong to the same category of noble metals. Palladium prices have risen consistently since January 2016. But the slowdown in automobile industry has pushed down palladium price since early February, with the metal losing 10 per cent in the futures market since then. “The trade talk between the US and China is yet to take any concrete shape. So there is no trigger for prices to go up in the near horizon,” said Gnanasekar Thiagarajan, CEO, Commtrendz Research. “It may take a year for prices of platinum to go up substantially.”

Platinum price went up a marginal 0.1 per cent to $901.55 on Monday. Gold also inched up, moving away from a near four month trough touched in the previous session, drawing support from a drop in equities and a jump in crude oil prices. Spot gold was up 0.3 per cent at $1,278.74 per ounce.

Courtesy: Economic Times