Soaring cost of gold causes jewellery market pandemonium

The soaring cost of gold and platinum is causing pandemonium in the UK's jewellery market as retailers and private owners rush to reappraise the value of necklaces, brooches and rings.

Jewellers in London's Hatton Garden - the capital's jewellery quarter - are raising the price of wedding bands on a weekly basis, with less-expensive palladium rings now coming into vogue. And insurers are urging clients to get another assessment of the value of their jewellery collections in response to the rapid rise in the price of precious metals, sparked by investors seeking refuge from volatile stocks.

"The price of platinum has been going up so fast, we're quoting people prices for platinum wedding bands on a Saturday and saying we can't guarantee the same price on Monday.

"Last week, we had to raise the price of all our platinum items by 30 per cent," said Adam Lawrence, a manager at Anthony Gray, a Hatton Garden jeweller.

The rise in prices has made less-expensive palladium wedding rings - which are lighter, but nearly identical in colour to platinum or white gold ones - more popular, London jewellers report.

"In a period of five months, the price of platinum has doubled and the making of a platinum ring which once cost £300 now costs £600, but palladium, only costs about £10 per gramme. It's quite light and doesn't tarnish and you wouldn't notice much of a difference between a palladium ring and a platinum one," said Frank Fajardo, manager at neighbouring Bassange.

Scores of jewellers and private investors have also had expensive articles reappraised to be sure they are not caught out in case of loss or theft.

The price of gold hit a record $975.90 yesterday, ending European trading at $970.40 a troy ounce, while platinum hit a record $2,158 a troy ounce last week.