Key facts
- Gold prices have surged to near record highs, driven by geopolitical and trade concerns.
- The value of the gold content in some luxury watches now exceeds their resale market worth.
- Brands like Omega and TAG Heuer are particularly affected, with dealers melting down used models.
- One dealer reported melting dozens of mainstream luxury watches this year due to increased demand for investment gold.
- An 18-carat Omega Constellation, valued at £4,000-£4,500 at auction, had a gold content worth £5,750.
Soaring gold prices are leading to the dismantling of some luxury watches, as their precious metal value now surpasses their worth on the second-hand market. Iconic models, such as Omega's Constellation, once symbols of glamour and worn by celebrities like George Clooney and Nicole Kidman, are being melted down.
Traders and industry experts report that used watches from brands including Omega and LVMH's TAG Heuer are most affected. British dealer Jon White of Gold Traders stated he has scrapped dozens of mainstream luxury watches this year, driven by the demand for investment gold. He recounted melting an 18-carat late-1970s Omega Constellation in excellent condition, noting its gold content was worth 35% more than its estimated auction value.
James Lamdin, founder of Analog Shift, a second-hand watch unit, explained that melting is primarily occurring with contemporary pre-owned watches and older vintage models that are not yet considered collectable. He also noted that new, overproduced watches are being melted due to unsold stock.
Gold prices reached a record high of US$5,600 per ounce in January, fueled by geopolitical and trade concerns, and currently hover around US$4,200 per ounce. While overall gold recycling increased by 5% in the first quarter to 366 tonnes, with gold jewellery demand rising 31% in value, the market price for used watches has not mirrored this trend.
High-end brands like Patek Philippe and Rolex, which tightly manage their production, command the highest premiums over melt value, with waitlists for some models extending up to eight years. Experts anticipate that with gold prices projected to reach between US$5,400 and US$6,300 per ounce in 2026, the pressure to dismantle watches for their metal content will continue.