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To: GST who wrote (140025)	2/28/2002 5:49:29 PM
From: Glenn D. Rudolph	Read Replies (3) \| Respond to of 164684

"Glenn: What would a 10% rise in the price of gold do to jewelry demand in your opinion?? (if anything). TIA -- btw, Lehman Bros. has a note out saying that gold can't stay above $300 because jewelry demand is very price sensitive.) " Past experience indicates the demand will change based on media coverage. If the media considers the 10% increase something the average person wants to read about, they will write storys about gold in papers and not specifically in the financial section. That was what caused the huge increase in jewelry demand in the early 1980s. People world wide were buying gold jewelry as an "investment." "Lehman Bros. has a note out saying that gold can't stay above $300 because jewelry demand is very price sensitive.) " This statement is totally incorrect in my opinion. The amount of jewelry purchased will remain the same. People are price sensitive in jewelry when comparing one outlet to another. If most retailers have about the same price, the consumer will buy the same amount of gold jewelry. An all gold wedding band that might sell for $300 at $300/oz gold will sell just was well for $375.00 at $330.00/oz gold. I do not know the Lehman Brother's guy but I doubt he knows the jewelry business. My experience has shown that gold and diamond jewelry sell better meaning there are more sales when the prices are increasing and the public is aware they are increasing. It is a psychological issue of buying something that will go up in price.