The price of platinum has fluctuated so much this year that Mototsugu Naito, representative of Platinum Guild International's (PGI) Japan office, told Reuters he has lowered his forecast for demand. Naito said he had expected Japanese demand for platinum for use in jewellery-making to expand this year following 2.5 per cent growth in 1999, but he was now less optimistic given a sharp rise in the metal's price this year.

"Now I expect demand will likely be flat (from last year's 41.1 tonnes). But even in the worst case, I believe demand will be maintained at 40 tonnes," he said. "If prices remain volatile, that could discourage jewellery makers from using platinum."Japan accounted for 57.2 tonnes of global demand of 174.2 tonnes in 1999, according to British platinum refiner Johnson Matthey, and used 72 per cent of that for jewellery purposes.

On June 27, platinum was fixed in London at $580 an ounce, the highest fix since December 1988, on the back of erratic supply from Russia, the world's second-largest supplier, and robust demand from the jewellery, high-tech and car industries.Reflecting the world market and dollar/yen rates, local platinum prices fluctuated widely in the first half of this year, ranging from 1,473 to 2,055 yen ($13.88-$19.37) per gram on a retail basis, according to major Japanese bullion house Tanaka Kikinzoku Kogyo. Spot platinum was quoted at $545.00/552.00 an ounce on Wednesday afternoon in Tokyo, with yen-based platinum futures at 1,945 yen per gram. A PGI poll of 160 major jewellery retailers in Japan showed the number of platinum jewellery items they sold between January and April rose by five per cent on the same period last year. Sales of gold items in the period were unchanged from a year ago, while overall jewellery sales were up one per cent.

-- (Reuters)