Platinum’s investment demand on the rise

KOLKATA: The demand for platinum as an investment product is surging as a price differential of $130 per ounce with gold has made this rare metal acceptable to the Indian investors. They have started buying it in bars of 1 gm to 50 gm. Interestingly, Indian men too have started liking platinum ornaments like chains, bracelets and cuff links.

Buoyed by the rising demand, the bullion dealers and jewellers expect that platinum requirement may go up to 5 tonne in 2012 compared to 3 tonne last year. In 2011, India had imported 15 tonne of platinum group metals, which includes platinum, palladium, rhodium and others.

Platinum price in the international market is hovering around $1,470 (Rs 80,556) per ounce compared to $1,600 (Rs 87,680) per ounce of gold.

“This price differential has attracted investors towards platinum. We had introduced e-platinum product in April this year. Till now, nearly 45 kg of platinum has been sold through the e-platinum route. In the case of e-platinum, there are only buyers and not much sellers as platinum is looked as a longterm investment,” said Anjani Sinha, MD & CEO of National Stock Exchange (NSEL).

“We are looking at an overall growth of 40-50 % with a portion of it coming organically and the rest through market expansion,” said Vaishali Banerjee, country manager (India), Platinum Guild International.

“Newer markets have seen 100% growth, while existing markets have had 40% to 70% year-on-year growth. With the metal showing consistent growth over the years and not volatile, many are considering platinum purchase as a long-term investment. We are at the initial stages of growth. So, we expect the demand to grow manifold over the next few years,” said Banerjee.