You've been lusting for that piece of platinum jewellery in the store window for long but have hesitated even asking for its price knowing fully well that it's beyond your reach. Well, you can cheer up now. With the new budget announcing a cut in the import duty of platinum from Rs 550 per 10 grams to Rs 200, that platinum piece may now be well within your reach.

Platinum is actually 20 times rarer than gold and therefore, many times more expensive. Platinum is also not traded as much as gold and hence, the price of platinum is not always readily available.

Nevertheless, the cost per gram of platinum considering the earlier import duty of Rs 550 per 10 grams, was roughly around Rs 1,400. Now, with the cut in duties, the cost per gram comes down to Rs 1,365 - a difference of Rs 35 per gram.

So, a five-gram ring, which would earlier have cost you Rs 7,000, would now cost you about Rs 6,825. Of course, these prices do not include making charges. Also, these are the prices for the highest level of purity.

Every piece of authorised platinum jewellery has a 'Pt' logo. Following the Pt logo would be a number, either 900 or 950. A Pt 950 indicates 95 per cent purity. That means the piece of jewellery contains 95 per cent platinum and five per cent of a base metal.

In gold jewellery, the base metal is usually copper, silver, nickel or zinc. However, while making platinum jewellery, the base metal used is more often than not a platinum group metal such as palladium.

In spite of this reduction in duties, platinum continues to be one of the most expensive metals. Gold for instance, at present prices, is worth close to Rs 6,000 per 10 grams. That includes an import duty of Rs 100 per 10 grams. So a five-gram gold ring would cost you Rs 3,000 (excluding the making charges). So, in spite of the cut in import duty, platinum is still at least twice as costly as gold.

It is important to understand the difference in pricing of gold and platinum jewellery. The price of platinum is not as volatile as that of gold. The main reason is that gold prices are subject to many extraneous influences such as central bank sales, currency movements and speculative activity.

Platinum, on the other hand, trades like any other commodity and its price is not influenced by extraneous factors. Further, pricing of platinum jewellery lacks transparency. When you buy a piece of gold jewellery, you usually buy it by weight. The price would then be the cost of the gold component, as per current prices, and other charges like making charges and wastage. When the jeweller gives you the authenticity certificate, he mentions clearly the price of pure gold.

But when you buy platinum jewellery, the break-up of the price component is not available. Although prices of pure platinum depend directly on international prices, since the market for platinum is rather unorganised, prices are not readily available.

Every piece of platinum jewellery has a price tag and is sold on a piece-rate basis. The price includes the metal price and making charges. Besides, unlike gold, you cannot buy platinum in the form of coins or bars.