Will consumer confidence in platinum be shaken? At issue is a new platinum alloy whose platinum content is 585 parts per thousand (ppt). In response to the new alloy, Platinum Guild International USA in April sent a letter to 400 industry manufacturers and retailers, reiterating its position on maintaining platinum’s purity at present levels and urging widespread participation in a forthcoming Federal Trade Commission Federal Register Notice for industry comment about marking and disclosure practices for the new alloy (see sidebar, p. 258).
“We want to get across that we are standing by our position of platinum jewelry’s being 90 percent or higher [platinum content in an alloy] and alloyed only with platinum group metals [in order to be marked platinum],” said Huw Daniel, PGI USA president.
In response to a request by Karat Platinum LLC, Inwood, N.Y., to the FTC to mark products made from 585-parts platinum alloy as “585 Plat. 0 PGM,” the FTC earlier this year issued a staff opinion letter stating that the proposed mark is “neither prohibited nor allowed.”
The FTC did warn that because the proposed product is sufficiently different from other platinum products that do contain platinum group metals, the mark alone is insufficient disclosure of its base-metal content, and additional information to distinguish it from other platinum products must be included when selling products made from it.
Karat Platinum has since revised its intended mark to read “.585 plat, .415 CO/CU,” says company president Paul Lundstedt. Rather than tell what the metal isn’t (an alloy of platinum group metals), the mark tells what the product is (an alloy of platinum, copper, and cobalt).
Lundstedt says Karat Platinum will follow strict and precise guidelines for marking and marketing the product and will take pains to communicate the facts about it. “We want the manufacturers to fully understand it, we want the retail jewelers to fully understand it, and we want the consumers to fully understand it,” he insists. “We are not trying to represent it as 950 platinum. We have no hidden agenda here. We want to be as transparent as possible.”
Karat Platinum is partnering with Allegemeine A.G., a division of Umicore, on .585 platinum. Lundstedt says Allegemeine deals with the technical and manufacturing side of the business, and Karat Platinum handles marketing and distribution.
At present, the industry works to the International Standards Organization Standard TC174, which specifies a range of fineness of precious metal alloys recommended for use in jewelry. In the case of platinum, these are 850 ppt, 900 ppt, and 950 ppt. The latter two are the most popular. Additionally, says Daniel, the level of base metals allowed is capped at 5 percent; the remainder must be platinum group metals.
Lundstedt maintains that the current guidelines—which were created in 1997 when there were no alloys that didn’t contain platinum group metals—are not law. The guidelines didn’t address this issue because there was no reason to, he says. Indeed, the FTC’s opinion letter issued in February said the guidelines neither prohibit nor allow the .585 alloy and the company has gone ahead with production. He expects several jewelry manufacturers to introduce .585 platinum pieces at The JCK Show ~ Las Vegas in June.
At a meeting of the Industry Image Task Force on Jan. 23, 2005, attendees raised a variety of questions and concerns regarding long-term technical and quality issues of 585 platinum, both at the manufacturer and retailer levels. Members of the task force also expressed concern that the new alloy could undermine the eminent position of platinum in the mind of the consumer as a pure metal and durable investment. Also at issue was whether the new product would alter general consumer confidence in and expectations of platinum jewelry.
Following the meeting, the Jewelers Vigilance Committee, with backing from PGI, Jewelers of America, Manufacturing Jewelers and Suppliers of America, American Gem Society, and a number of manufacturers and retailers, asked the FTC to include a request for industrywide comment about marking products made of alloys with less than 800 ppt platinum and no platinum group metals, along with the request for the staff opinion letter.
The FTC agreed to the trade’s request to publish a Federal Register Notice soliciting industry comment on whether its Guides for the Jewelry Industry should be amended. At press time, Daniel expected the Notice to be published soon.
The guides state that for a product to be marked or described as “platinum,” it must contain a minimum of 500 ppt pure platinum, and the mark or description must disclose the amount, in ppt, of platinum group metals (PGMs) in the product. (See sidebar, p. 250.)
Lundstedt said his firm undertook the development of the alloy very slowly, with substantial testing in each form it might be delivered—sheet, shot, tubing, and wire. Karat Platinum does not make jewelry; it only supplies the raw metal in whatever form a manufacturer wants it delivered. He added that a number of jewelry manufacturers have also experimented with it over the past 18 months to ensure that it performs well in any form of jewelry. “We’ve been working on it for many years,” he says. “We don’t want to rush. We want to be sure to deliver a quality product to consumers.
He continues, “It also seems to me to make sense to introduce platinum to an audience that’s otherwise not able to afford it. As they get attuned to platinum, and their economic circumstances improve, we’d think they’d want to trade up to 950 platinum.”
In a separate letter to the FTC, attorneys for Karat Platinum said their client’s efforts, as well as other manufacturers’ efforts to produce jewelry from an alloy containing less than 85 percent platinum, have been hampered by “statements in widely disseminated trade publications which incorrectly claim that the production and marketing of jewelry made from the  Alloy is ‘illegal’ under the Guide. These include statements that imply that any product containing characteristics that are not specifically addressed by the examples in the Guide are not permitted by the FTC, and statements that all jewelry products containing less than 85 percent platinum must contain other PGMs.”
As a result, the letter said, jewelry produced from a lower alloy has been publicly branded as illegal and prices have been kept “artificially high.”
Daniel says the price of platinum is not artificially high. “There is no secret stockpile of platinum. The reason why platinum’s price has been so high is because demand has outstripped supply.”
Lundstedt says he’s not an expert in commodities and can’t comment about platinum supplies, but, given all the industrial applications of platinum, he can’t imagine how its use in another sector—jewelry—could adversely affect supply.