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Palladium: A Whiter Shade of Pale
Move over, white gold. If the new Palladium Alliance International has its way, retailers and

There's an old truism about ice cream that goes like this: Howard Johnson's (today it would be Baskin-Robbins) sells 28 flavors but half its sales are of vanilla. When it comes to white jewelry metals, white gold has long been the default option from a wide selection that includes platinum, silver, and, lately, titanium and tungsten. Now a brand new trade group, the Palladium Alliance International (PAI) wants to make that platinum group metal the new vanilla of precious white jewelry metals.

Some say that's a tall order in an industry which is already suffering from what might be called new metals fatigue. "There's been such a welter of new metals introduced in the past few years that the retailer is confused," says David Skusa of Guertin Brothers, Roanoke, Virginia. As a result, his company is taking a wait-and-see attitude toward palladium.

Others, however, say establishing a broad beachhead, if not quick dominance, for palladium can be done in short order because openness to new products is much greater today and adaptability is much swifter. "The last steep and stubborn learning curve in this industry was with platinum in the 1980s," says Bruce Pucciarello of Novell, Inc., Roselle, New Jersey. "Once platinum was accepted, the industry became much more conditioned to change. I'm seeing turnover with our palladium rings that is 60 percent faster than with almost any other new product."

The new alliance is counting on industry goodwill toward palladium from the outset. Its founder is Frank MacAllister, chairman of Stillwater Mining Company, the Montana palladium extractor that produces roughly half of North America's annual 1.2 million ounces of this platinum group metal. That's less than 15 percent of the 2004 annual world total of 6.7 million ounces (at least 80 percent of it from Russia and South Africa) but nowhere near enough to meet global demand for jewelry palladium. Indeed, one wonders why Stillwater feels it has to stoke demand for palladium jewelry when Chinese palladium usage for jewelry nearly tripled from 363,000 ounces in 2003 to just under 1 million ounces in 2005.

That's why PAI opened its first office in Shanghai, China, in March. But MacAllister also sees demand for palladium increasing just as much in America as in its number one Asian trading partner—although it still remains inconsequential in comparison. Last year, U.S. jewelry makers used around 12,000 ounces of palladium—up a promising 245 percent from 5,000 ounces in 2003. All in all, palladium is on a fast track to global acceptance as a jewelry metal.

This is why Tom Gelbart, a Philadelphia jewelry repairman, spent time last year honing his platinum metals bench skills. "Palladium demand reminds me of a Porsche that goes from zero to 60 miles in five seconds," he says. "In less than 12 months, this metal has gone from obscurity to attention-getter. I want to be ready when palladium sales are taking off everywhere."

Have you heard of the Palladium Alliance, I ask him. No, he answers. "I take it they will be a Platinum Guild for palladium," he says. When I nod in the affirmative, he hisses "Yesss!" with glee, and continues, "See what I mean? Palladium already has its own trade organization and the market isn't even a year old." Just wait until Gelbart hears PAI's ambitious plans for the metal.

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