LONDON – Used luxury watches, such as Omega’s Constellation model worn by movie stars George Clooney and Nicole Kidman at the Met Gala, are being melted down, because due to gold prices approaching record highs, their metal content exceeds their resale value, according to experts and consultants, reports today, June 13, Reuters.
Used models from companies such as Omega and LVMH are the most affected by this trend, according to dealers, industry experts and investment advisors.
The price of gold changed the calculation on the watch market
In May, British dealer John White of Gold Traders melted down an 18-carat Constellation watch from the late 1970s that was in excellent condition, one of dozens of mainstream luxury watches he has written off this year as demand for investment gold has increased.
“It was a beautiful watch, but if the buyer had put it up for auction, what would he have achieved?” said White, who also manages the auction house.
He added that the gold content of the watch, one of many models produced by Omega, owned by Swatch, was worth £5,750 ($7,749), 35 percent more than the estimated auction value of £4,000 to £4,500.
Which brands are most affected by the trend
The founder of the Analog Shift second-hand watch sales department of the Watches of Switzerland company, James Lamdin, said that melting is primarily done with contemporary second-hand watches, but also with older vintage watches that are not collectible.
A spokesperson for Swatch and Rolex said they did not want to comment on these allegations.
The companies LVMH, Richemont, Patek Filip and Odemar Pike did not respond to requests for comment.
Record gold prices are changing the luxury market
Gold prices soared to a record high of $5,600 an ounce in January this year, as geopolitical concerns and trade worries prompted investors to turn to precious metals as a safe haven. Gold is now hovering around $4,200 an ounce, nearly double the 2024 average.
The market price of used watches, however, did not move in the same way. There are no official data showing how many luxury watches are melted, he says Reuters.
Data from the World Gold Council show that total gold recycling in the first quarter increased by five percent to 366 tons, while demand for gold jewelry increased by 31 percent in value, to $47 billion.
Watches can contain anything from bits of gold to more than 200 grams, meaning their scrap value can reach tens of thousands of dollars.
High-end brands, which tightly manage new production, such as private companies Patek Filip and Rolex, command the highest premiums over melt value, three industry experts said.
Less exclusive brands such as TAG Hojer, Breitling and Omega, however, struggle to control the high retail prices of new watches, as customers can buy a second-hand watch for much less money, reports Tanjug.
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