The world's largest jeweler just told CNBC it's betting on platinum-plated jewelry to escape volatile silver prices. Silver is currently falling. Pandora wants protection from price swings by switching to a different metal with price swings. This is the financial equivalent of leaving your wife because she talks too much and marrying a f*cking auctioneer.
Platinum prices have moved between $800 and $1,200 per ounce over the past three years. Silver moved between $18 and $30 in the same window. The CEO looked at these two neurotic metals and decided the solution to volatility was a different kind of volatility. Revolutionary thinking from the people who sell you a charm bracelet for the price of a transmission repair.
Retail traders are already doing the math. They're convinced this means platinum is about to moon. They're Googling "how to buy platinum futures" on their phones while sitting in a 2011 Camry with a check engine light that's been on since Obama's second term. They'll be leveraged long by Friday. They'll be liquidated by Monday. The jewelry company will continue plating cheap bracelets regardless of what happens to either metal because the markup on sentiment is better than the markup on raw materials.
The headline says "despite falling silver prices" like that's the paradox. It's not. Falling prices are exactly when you'd switch if you're trying to lock in lower input costs. Rising prices are when you panic and overpay for substitutes. Pandora timed this to look strategic while silver is cheap. They'll roll out the platinum line. Consumers will pay the same price they always did. The margin stays fat. The metal source changes. Nobody wins except the CFO's bonus structure.
The real move here is convincing CNBC that a jewelry company changing its plating material qualifies as market insight worth broadcasting to people who are supposed to be managing money.
Photo by Siora Photography on Unsplash
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