With gold prices zooming to record levels, middle class families have taken a fancy for platinum ornaments creating a new segment for the same in the domestic market.

As a result, whether gold jewellery retailers like it or not, a sudden trend favouring the white precious metal has forced leading gold jewellers to add exclusive space for platinum jewellery despite the fact that it might affect their gold sales.

Princen Jose, chairman and managing director of Chennai-based Rs 250-crore gold exporter Prince Jewellery that has retail outlets in Chennai, Thiruvananthapuram and Bangalore, said the platinum jewellery sales gained momentum in the past five years. ?Particularly the middle-class segment started buying platinum jewels when the gold prices surged above Rs 15,000 per 10 gram, almost touching the levels of platinum,? he said. Though the platinum business in Prince Jewellery counters was negligible five years ago, it had, at present, increased to around 4% of total retail business.

Another Chennai-based gold retailer GR Thangamaligai (GRT), which offers platinum jewellery in all of its seven showrooms in Tirupati, Chennai, Hyderabad and Bangalore, has allotted one of the three floors of its mega showroom in Chennai exclusively for platinum and diamond jewellery. GR Radhakrishnan, managing director of GRT, said: ?Our platinum jewellery sales have increased by 25-30% this year compared to the last year.?

Platinum is highly valued for its beauty and purity together with its particular properties. Although the normal purity is 95% in Europe and the US, it may be down to 85% in certain countries.

Colour, strength, hardness and resistance to tarnish are some of the advantages of platinum. But so far, Indian customers were away from platinum owing to its higher price band, which was double of gold.

Platinum prices suddenly tumbled in the fourth quarter of the last year when the world auto market witnessed slump due to economic slowdown. Platinum is used in catalytic converters fitted in vehicles. Automakers worldwide account for more than 60% of platinum demand.

Platinum price that touched $2,250 per ounce in May 2008 tumbled to around $850 in September. At present, prices are hovering in the range of $1,200-1,280 per ounce. At a time when platinum prices declined, gold prices surged alarmingly. The yellow metal price breached $1,000 per ounce-mark in February, creating a panic among middle class gold buyers.

?Only 12 gold jewellery showrooms were selling platinum jewellery in the country when Platinum Guild International, the apex body of the global platinum industry, started its Indian edition in 2000. Now platinum jewellery is occupying space in 400 showrooms in India,? said Vaishali Bannerjee, manager of the Platinum Guild India (PGI). Looking at the current trend, she said the platinum jewellery sales were expected to expand to more than 1,000 quality showrooms in the next 2-3 years.

During the recent Akshay Tritiya festival, considered as an auspicious day for buying gold, platinum jewellery sales increased by 35% year-on-year, Bannerjee said.

Gold retailers, however, are not ready to accept that platinum will impact the yellow metal jewellery trade. Vinod Haygriv, chairman of the All India Gems and Jewellery Trade Federation and the managing director of 140-year old Bangalore-based gold and diamond jewelry specialist C Krishniah Chetty and Sons, said that platinum was preferred when strong workmanship required to set stones like solitaire. But platinum sales would not affect the gold business even if gold prices increase further.

?The platinum sales volume may increase when the overall jewellery market expand in the future, but market share will remain the same level of around 2-3% of total jewellery business,? he said. However to cater to the taste of all classes, Haygrive said, ?We have affordable platinum jewels priced between Rs 20,000 and to Rs 70,000 with more than 1,500 designs.?

According to PV Jose, chief patron of the Kerala Jewellery Manufacturers Association, the platinum boom was a temporary one. ?Customers may buy small units of platinum jewellery now because of high gold prices. But there is no chance for big-level business for platinum jewellery in the future as they do not have resale value.?