Key facts
- Gold prices have surged, nearing record highs, prompting the melting of some luxury watches.
- Models from brands like Omega and TAG Heuer are particularly affected.
- The scrap value of the gold in these watches now often exceeds their resale market worth.
- An 18-carat Omega Constellation watch's gold content was valued at £5,750 in May, significantly more than its auction value.
- Experts express sadness and concern over the destruction of potentially collectible timepieces.
- Gold is expected to continue its upward trend, potentially reaching $5,400 to $6,300 per ounce this year.
Gold prices have surged to near record highs, leading to a trend where some luxury watches are being melted down for their metal content. Brands like Omega and TAG Heuer, whose watches are often made of 18-carat gold, are particularly affected. According to traders and experts, the scrap value of the gold in these timepieces now frequently surpasses their resale market worth.
Jon White, a dealer at Gold Traders, reported melting an 18-carat Omega Constellation watch in May, noting its gold content was worth 35% more than its estimated auction value. James Lamdin, founder of Analog Shift, stated that this practice is primarily occurring with contemporary pre-owned and older vintage watches that are not yet considered collectible. He also noted that some new, unworn watches from overstocked markets are being stripped down.
Gold prices reached a record $5,600 an ounce in January and are currently hovering around $4,200 per ounce, with expectations of reaching between $5,400 and $6,300 this year. While overall gold recycling increased by 5% in the first quarter, the market price for used watches has not kept pace with the rise in gold values. Experts like horological historian Adrian Hailwood expressed sadness over the permanent loss of these timepieces.
High-end brands such as Rolex and Patek Philippe, which tightly manage new production and have long waitlists, command premiums that keep their resale value well above melt value. However, less exclusive brands like TAG Heuer, Breitling, and Omega often see their models depreciate significantly after sale, making them more susceptible to being melted down. Retired engineer Mitchell Talisman sold gold watches and a chain for $2,660 in December, motivated by the higher gold prices.