Investing in Platinum and Palladium Jewelery

In the world of precious metal investing, most people choose to focus on the commodity value and spot price of precious metals, including gold, silver, platinum and palladium. However, not all are made into bars, ingots, bullion and coins. Jewelery has long been one of the most common ways for most people to invest in these metals, though the use of platinum and palladium for jewelery has been relatively recent.

There are a few things that a collector of jewelery will want to keep in mind, no matter what precious metals is involved. For starters, you want to make sure you have some guarantee how pure the piece is. Some professionals estimate that as much as 30% of the gold jewelery sold in the US has less gold than is stamped on it. Also, as time goes by, normal wear on gold and silver pieces can cause significant enough loss to actually change the weight of the piece notably over time. Silver, of course, is prone to tarnish, and its use with precious stones is very limited except when alloyed with gold.

Both platinum and palladium, on the other hand, are harder metals that retain much of the malleability of gold. Platinum, for instance, is able to be worked in much more detail than gold, and is also far more resistant to wear and scratches, even when put into daily use. The same is true of palladium, but it is only about half as dense as platinum.

Precious metal investing in either palladium or platinum jewelery is most often done in the context of a collection. As such, most professionals recommend making sure you purchase pieces you actually like and find aesthetically pleasing. As a general rule, people are more likely to hold on to pieces that they’ll keep long enough to really appreciate in value.

Collections are most often either antique or modern, with the vast majority of collections including modern (since 1950) pieces. This is due to the relative rarity of platinum and palladium pieces being made before this time. While there are some rings made in the late 19th and very early 20th century, the widespread use of either metal in decorative objects tend to be relatively recent. Pieces made before that time are very rare and often command shockingly high prices.

Palladium is being touted by many as a very good substitute for gold. In wedding bands and engagement rings, for instance, it is valuable for being just as lustrous and workable as gold. Being much less dense than platinum, palladium also tends to weigh far less, making it a perfect substitute for a design that is made heavy by large amounts of the metal or large stones, as can often be in the case. It is also many times more rare, but the price remains rather low in comparison.

This is good news for those looking to scratch their precious metal investing itch with something unusual. The price of palladium has been hovering around historical lows for much of 2008 and early 2009, and seems to be set to rise just about any moment. At the same time, platinum has also maintained a spot price that is comparable to that of gold during the dame time frame.

Hanging on to platinum and palladium jewelery is the most important part of making it pay well in the long-term is to hold on to your investment for several years. Unlike cash and stocks, jewelery is not very liquid.

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Arthur McGuire

March 5, 2009