1. Michael Allchin Chief Executive and Assay Master The Birmingham Assay Office

2. UNPRECEDENTED TIMES UNPRECEDENTED CONSEQUENCES – an analysis of how rising precious metal prices have impacted on the UK jewellery industry in 2011

3. Average Prices £/oz 2001-2010

4. Average Metal Prices £ per oz Average Price for year All 2010 YTD Year2004200520062007200820092010 High 2011 High Silver3.634.026.286.688.019.3413.0219.8829.25 Palladium125111174177190168340511534 Gold2232453283474726227939141,182 Platinum46149361965283777210381,1731,156 1 oz 18ct gold - £886.50 Au + 4p Cu Source: LBMA/ Johnson Matthey

5. Average Gold price 1973 to 2010

6. Diamond Prices – Antwerp Index Year 1 carat 50 points 25 points 2000283.0273.9109.5 2001284.2268.0107.8 2002284.1256.5103.1 2003284.0253.8100.5 2004306.6258.9102.5 2005330.4262.2105.4 2006328.4253.6106.8 2007319.6251.3106.2 2008370.5265.2109.8 2009337.9247.1107.1 2010331.2247.5108.3 1973 = 100 Index of prices in $US

7. Diamond Price Index to Sept 2011

8. Price Index 2008 - 2011

9. The four wedding rings - retail Comparative cost of precious metal content at retail (as at 26/09/11) AlloyArticle weight gms £ retail 2001 £ retail 2011 Retail Price increase 950 Pt8.0£360£1216£856 750 Au6.4£115£829£714 950 Pd4.8£65*£301£295 925 Ag3.9£1.40£10.50£9.10 * 2005

10. The Prawn Sandwich & the Gold Earring Was 99p Now £1.49 Was £ 9.99 Now £49.99

11. Unprecedented Consequences

12. Impact on UK Hallmarking Volumes

13. Number of articles by metal YearGold (m)Silver(m)PlatinumPalladiumTotal (m) 200127.17.1184,00034.4 200225.28.7244,00034.2 200324.210.8314,00035.2 200423.610.8363,00034.8 200519.49.0323,00028.8 200616.77.9316,00024.9 200715.89.2343,00025.4 200810.48.3279,00019.0 20097.08.7263,00044,00016.1 20105.88.6266,290114,11214.8 YTD 2010 YTD 2011 % vs 2010 3.3 2.7 -17% 5.1 3.9 -24% 178,749 163,016 -8% 87,419 79,632 -10% 8.7 6.9 -21%

14. Hallmarking Figures from 1975

15. Gross weight of gold jewellery hallmarked

16. Value at the time

17. Jewellery & Watch market Category 2007 £m 2008 £m 2009 £m 2010e £m share % change % Precious metal jewellery3,2173,1963,1823,19067-0.8 Watches1,005987 99821-0.7 Costume Jewellery5055175315621211.3 TOTAL4,7274,700 4,7501000.5 Source: MINTEL UK Retail Sales of Jewellery and Watches by sector

18. Scrap Gold

19. Gold Supply from old scrap (tonnes) Country200520062007200820092010 1 USA60.481.084.593.5124.0143.0 2 China41.744.641.670.3102.8138.2 3 Turkey67.782.571.5199.0217.2122.0 4 Italy46.753.557.161.078.098.0 5 India94.080.073.089.5115.581.0 6 UK & Ireland4.510.711.738.759.469.8 UK & Ire Consumption59.452.550.337.231.827.3 7 Indonesia67.071.968.072.579.964.9 8 Vietnam7.88.39.012.251.564.8 9 Mexico7.212.017.628.150.358.0 10 Pakistan30.933.431.735.553.949.8 11 Thailand12.419.137.451.766.044.7 WORLD TOTAL902.41,132.8981.81,315.61,694.71,645.5

20. Scrap Gold to June 30 th 2011 Global scrap supply dropped by 7.2% in the first half of 2011 = 752 tonnes Drop mainly all accounted for by Turkey and India – elsewhere flat Distress selling eased Higher prices yet expected, waiting game Europe 6% up in first half = 168 tonnes But North slowing down and South increasing due to economic climate

21. Global Scrap volumes 2008-2011

22. Total weights and value at 2010 Wt of fine (Kg)Value at 2010 (£million) 1975-1980 137,8563,518 1981-1990 251,772 6,425 1991-2000 393,34810,038 2001-2010 371,544 9,482 Total 1,154,521£29,463 UK and Ireland scrap returns:2008 = 38,700 kgs 2009 = 59,400 kgs 2010 = 69,800 kgs Three year total = 167,900 kgs = 14.5% of HM total Source: Thomson Reuter GFMS

23. Consequences for Diamonds

24. Diamonds – The Consequences Higher prices = more temptation to cheat Internet selling makes it easier; more reliance on certification Rogue certificates muddying the waters New laser and HPHT treatments difficult to detect Small white synthetics not far away – parcel pollution inevitable Integrity of the industry could be at risk

25. Non Precious Metal Brands Ernest Jones Men’s Tungsten & Silver Ring £115 Aagaard Help for Heroes Bracelet £79 Bracelet £149 Stainless Steel & bead bracelet £50