Anybody who has shopped for jewelry in the last 15 years or so knows that Platinum is the “go-to” metal for high-end jewelry, especially jewelry involving diamond settings. And yet, even 20 years ago, it was still overshadowed by gold. I know this because about 20 years ago was the first time I shopped for wedding rings. The word “platinum” never came up. 15 years later, when I was once again in the market for a big fat engagement ring, trends in the jewelry world had changed significantly and there was really no question that it “had” to be platinum. Gold had become downright gaudy in comparison.
So what explains the meteoric rise of platinum from a relatively unknown and unused precious metal to its current state as the undisputed ruler of the jewelry kingdom? Platinum is the most rare of all precious metals. Although its first discovered use was for the lining of a sarcophagus around 700 BC in Egypt, a real demand for platinum didn’t occur until about 20 years ago. Since then it has soared to astronomical proportions, with its price tag also rising to staggering heights. Japan actually accounts for nearly half of platinum jewelry sales worldwide, with the US and China battling for 2nd place.
The use of platinum in modern-day jewelry-making didn’t actually gain any real ground until 1900, when none other than the fabled Louis Cartier started working with it. Because it is so much stronger than gold, it has since become the preferred setting for diamonds. However, jewelry only accounts for about 40% of platinum’s uses. 50% of its uses are for industrial purposes. A full 20% of all consumer goods use platinum in their production. Half of the annual production of platinum is actually destroyed by industrial uses. This is the real reason that the price of platinum has soared over the last 2 decades: its price is an index of the rate of industrial progress in developing countries such as China.
Add to that the incredible scarcity of platinum on this planet: annually, only 130 tons (less than 1% of global silver production) are mined, with 80% of all platinum mining, and 88% of all platinum reserves, limited exclusively to the country of South Africa. The cumulative total of all platinum ever mined throughout history could fit inside a cube of less than 25 feet in diameter. Add to that the minor detail that for every ounce of pure platinum, 10 tons of ore are mined – in some cases, nearly a mile under the earth at extraordinarily high temperature – and that it takes 6 months to extract the platinum, and you have a very rare precious metal indeed.
You want my prediction? Platinum is simply too rare to be sustainable for the long haul. Just like in the rock star universe, where “it’s better to burn out than to fade away”, platinum will sink from the jewelry horizon in the next few years, where it will be eclipsed by the much cheaper but just as manageable and strikingly beautiful palladium. What, palladium isn’t ringing any bells for you? By the time you’re shopping for an engagement ring for Wife #3, chances are that it will be.