ROANOKE TIMES 
                      Copyright (c) 1997, Roanoke Times

DATE: Saturday, January 25, 1997             TAG: 9701270088
SECTION: BUSINESS                 PAGE: BUSINESS EDITION: METRO 
DATELINE: NEW YORK
SOURCE: Associated Press 

PRICE OF GOLD FALLING IT'S NOT REFLECTED IN JEWELRY'S COST

Eying that gold ring at Tiffany's? Or have you tucked away some cash to buy a shiny gold bracelet for Valentine's Day?

Better keep saving, because jewelry prices aren't dropping any time soon, despite the fact that gold has been losing its luster in financial markets.

Gold prices fell below $350 an ounce this week for the first time in more than three years, continuing a selloff that's taken the precious metal down more than $30 an ounce in the last three months. On New York metals markets Friday, gold traded for slightly more than $352 an ounce.

Investors long relied on gold as a hedge against inflation and economic instability. But tame inflation and mostly calm economic times have softened demand for gold bullion and sent its price falling.

U.S. consumers, however, probably won't see any immediate benefits from the dropping prices, mostly because craftsmanship in making gold jewelry and significant retail markups offset any possible price reduction in raw materials.

``Price fluctuations doesn't necessarily mean the price of jewelry is going to change,'' said Lynn Ramsey, president of the Jewelry Information Center, a New York-based trade group. ``Gold was close to $400 an ounce last year, and that didn't affect the average price of gold jewelry.''

In fact, the average retail price of a piece of gold jewelry has remained in the $86 to $88 range during the last three years, Ramsey said.

Gold is the most popular precious metal used in jewelry. An estimated $11.8billion in gold jewelry was sold in 1995, a 4.4percent increase from the previous year.

Shoppers can find gold jewelry in a wide range of stores, from the upscale Cartier and Harry Winston to mass merchants including Sears and Wal-Mart.

But wherever consumers purchase their gold, it's unlikely they'll see lower prices, especially with the cost of the gold itself accounting for only about one-fifth the total jewelry price.

``People will get excited when they hear gold prices are low, and interest in gold will pick up,'' said Edward Faber, president of the Aaron Faber Gallery, a New York jeweler. ``But the actual price probably won't be affected that much.''

Jewelry prices, however, could decline if gold continues its dive over an extended period.

``If it stays down, and the cost of raw materials goes down, that will feed itself into the product,'' said John Lutley, president of the Washington, D.C.-based Gold Institute.

For consumers looking for the best buys, travel abroad is required. Deals are sure to be found in markets where gold jewelry is sold by weight and retailers don't tack steep markups onto their merchandise.

``I'd check out India and China and lots of other markets in the Far East,'' Lutley said. ``In cases like that, we'll see the change. But those are the exception.''

LENGTH: Medium:   61 lines
ILLUSTRATION: GRAPHIC:  Chart by AP.