Dubai: Just like gold and silver, platinum jewellery is widely considered of great value. As it is more precious, it is significantly more expensive than its peer metals. However, while you can sell your gold and silver deposits when in dire need of money, it’s not as easy when reselling platinum jewellery.
“Platinum is generally valued higher than gold as platinum is rarer than gold, has a higher density and is purer. For instance, platinum rings require more platinum than gold rings require gold, and this raises the overall cost,” said Rochelle Mariam, a Dubai-based precious metals retail analyst.
“Although platinum is rarer and generally considered to be more valuable than gold, its resale value is less stable, and fewer shops are willing to buy it back. More so, because the cost of platinum is far less stable than gold and silver.”
Can you profit when you sell your platinum jewellery?
Throughout history platinum has tended to be more expensive than gold and is generally considered to be the most valuable metal of all. Culturally, this is the hierarchy among precious metals, which roughly translates into their material value when it comes to jewellery.
“Platinum is an extremely rare metal. Sometimes mistaken for silver, platinum is often found in alloy form with the other platinum-group metals and iron mostly. This is primarily why it's difficult to resell platinum jewellery for the original value,” added Mariam.
“In translation, the value of platinum jewellery is often subjective as jewellery have to be melted down before they can repurpose it for coins, bars, or even different jewellery. If you're looking for seeking a lower cost metal, stick with white gold and silver, as platinum can be quite an investment.”
Is platinum a good investment despite its high cost?
As platinum's rarity and hardness compared with gold ensures it is recognised as the world's premier jewellery metal, statistics indicate that demand for platinum is also high for its use in many high-volume industrial applications, such as the manufacture of fertilisers, petroleum and fibreglass.
“Platinum is often considered a diversification option for investment portfolios, as it has a low correlation with other asset classes, such as stocks and bonds,” said Zubair Shakeel, a UAE-based investment manager.
“Platinum holds its value over time so it has historically been used as an inflation hedge, but not as much as gold. Gold is traded more actively, meaning it has higher liquidity and can be easier to buy and sell. Again, the most suitable investment choice depends on your investment objectives.”
• Inflation hedge: Like silver, platinum also acts as an inflation hedge, given its inherent worth, unlike currencies. Also, platinum holds long-term value, especially when interest rates are low and fixed-income investments aren't earning much. Then again, not as much as gold.
Is it hard to sell any form of platinum jewellery?
The resale value of platinum jewellery is far less stable, and fewer shops are willing to buy it back, primarily because the price of platinum can be extremely volatile, often soaring to twice the value of gold in good economic times and dropping below gold in bad times.
However, Mariam added: “Often times platinum rings are, at the least, worth their value by weight. To find out what your platinum ring is worth determine its purity, find its weight in grams, multiply its weight by the current price, and discount that by about 50 per cent to 70 per cent.”
Why else is it hard to sell platinum jewellery? While the value of gold typically rises in times of economic uncertainty, the value of platinum doesn’t rise as much as its peer metal. That’s because gold is considered a better store of value, making it a safe haven during uncertain periods.
• The current market price, which goes up and down in relation to the economy, stock market, inflation and demand for platinum
• The size and weight of the ring
• The purity of the metal
• The quality of the metal
• Whether or not it is set with any stones, such as diamonds
• If it is a branded piece of jewellery
BOX - How much can you sell a platinum ring for?
How much you can sell a platinum ring for will depend on:
• The current market price, which goes up and down in relation to the economy, stock market, inflation and demand for platinum
• The size and weight of the ring
• The purity of the metal
• The quality of the metal
• Whether or not it is set with any stones, such as diamonds
• If it is a branded piece of jewellery
Key takeaways
“Platinum is valuable because of the characteristics it carries as a metal. The fact that it is dense, corrosion-resistant, and chemically stable and typically unreactive, with a high melting point, makes it ideal for many industrial applications,” added Shakeel. But is it as useful in the form of jewellery?
“Its beauty, stability, and strength also make it an ideal choice for jewellery. These characteristics drive up the demand for platinum, while its relative rarity drives up the price. But when it comes to reselling the metal, the seller faces a harder time than buyers looking to buy them new.”
Does platinum hold its value? “Yes, platinum holds its value, but only due to its rarity as a precious metal. As gold is the most used metal for jewellery, the annual consumption of platinum creates a high demand and maintains its value over time. But then again not as much as gold,” added Mariam.
