Jewels serve two purposes in a watch.
First, reduced friction can increase accuracy. Friction in the wheel train bearings and the escapement causes slight variations in the impulses applied to the balance wheel, causing variations in the rate of timekeeping. The low, predictable friction of jewel surfaces reduces these variations.
Second, they can increase the life of the bearings. In un jeweled bearings, the pivots of the watch's wheels rotate in holes in the plates supporting the movement. The sideways force applied by the driving gear causes more pressure and friction on one side of the hole. In some of the wheels, the rotating shaft can eventually wear away the hole until it is oval shaped, and the watch stops.
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