Abstract
Jewellery is the most important end use of newly mined gold. This paper analyses the relationships between jewellery demand, the price of gold and expenditure and taste variables. The analysis exploits a new time series/cross-section data set on trade purchases of jewellery in six developed countries, using a seemingly unrelated regression (SURE) model. We find direct price elasticities in the range −0.5 to −1.0, and some evidence of speculative purchases ahead of expected price changes.
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