Precious Metals

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Precious Metals JewelleryWho needs Who? Dr
Paul Walker3rd Dubai City of Gold Conference
Dubai, 21-22 February 2005
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THE GFMS GROUP

• INDEPENDENT, INFORMED INTERNATIONAL
• GFMS Limited Precious Metals - Paul Walker CEO
• GFMS Metals Consulting Ltd Base Metals Neil
  Buxton Director
• GFMS Mining and Exploration Limited Richard
  Napier Director
• GFMS Analytics Limited regular analysis of all
  the metals markets but focus on precious - Rhona
  O Connell Director
• Coming soon, GFMS Consumer Research Limited
  focus on consumer research covering the jewellery
  and investment markets.

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17 Analysts Consultants full-time
representation in UK, India, China, Australia
Russia.Not just desk-based Over 40 countries
visited in the last 12 months. More than 7,000
meetings since 1996.Annual Gold, Silver and now
also Platinum Palladium Surveys
GFMS Unique Research Capabilities Programme
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Presentation Outline

• Historical relationship between jewellery demand
  and metal supply
• Who are making the money? a look at the value
  chain
• Important macro trends for jewellery
• Conclusions

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Jewellery demand as a proportion of total supply
in 2004
Based on GFMS preliminary 2004 data
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The value of metal used in jewellery in 2004
Based on GFMS preliminary 2004 data
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Jewellery global market size?
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Gold jewellery mine output - An historical
perspective
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Gold jewellery mine supply
Based on GFMS preliminary 2004 data
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And for silver? demand covers supply
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What about Platinum?Well, nearly the same story
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Average prices over the same 20 year period
US Dollar Major Currency Index base year 1973
100
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China- Jewellery Margins(Fabricator)(Basis
US860/oz and US411/oz metals prices)
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China- Jewellery Margins(Retailing)(Basis
US860/oz and US411/oz metals prices)
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But does the jewellery industry need support?

• Competition for Jewellery
• technology goods
• travel
• luxury consumer goods
• other new products

• Mega trends
• womens earning power
• mens jewellery
• age at marriage
• leisure hours
• investment background
• Demographic changes

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Precious metals JewelleryWho needs Who?
Some Conclusions

• All metals have relied upon jewellery demand to
  soak up increased mine supply.
• Jewellery as a spend category is under threat.
• Marketing expenditure does not appear to be
  coordinated nor monitored.
• More strategic, independent research on the
  jewellery sector is needed.