Gold's strength this year has created an unusual consequence for parts of the luxury watch market: examples of vintage and contemporary gold watches are being sent to the furnace when their metal is worth more than their resale price.
One emblematic case involved an 18-carat late-1970s Omega Constellation in excellent condition that a British dealer, Jon White of Gold Traders, melted down in May. White said the Constellation's gold content was worth 5,750 ($7,749) - about 35% more than the 4,000-4,500 he estimated the watch would have achieved at auction.
White, who also runs an auction house, told Reuters: "Beautiful watch. But in reality, had the customer consigned that to auction, what would they have achieved?" He said that watch was one of dozens of mainstream luxury timepieces he has scrapped this year as demand for investment gold has risen.
Industry sources interviewed for this article - more than a dozen traders, experts and investment advisers - said used models from manufacturers such as Omega and LVMH's TAG Heuer have been most affected by the trend. James Lamdin, founder of Watches of Switzerland's second-hand unit Analog Shift, said melting is "primarily happening with contemporary pre-owned and also with older vintage watches that are not already collectible." Spokespersons for Swatch and Rolex declined to comment for this story. LVMH, Richemont, Patek Philippe and Audemars Piguet did not respond to requests for comment.
Gold and market dynamics
Gold prices surged to a record $5,600 an ounce in January amid geopolitical and trade concerns that pushed investors toward safe-haven assets. Prices have since fallen from that peak but remain elevated - around $4,200 per ounce at the time of reporting - nearly double the 2024 average. Despite this, market prices for pre-owned watches have not followed the same trajectory, creating situations where the melt value of a watch's precious metal outstrips its resale value.
Adrian Hailwood, a specialist in horological history, said he finds the practice distressing: "I find it very sad, because obviously once something has been melted, it's gone forever." There are no official tallies for the number of luxury watches being melted, but World Gold Council data cited for the period shows overall gold recycling in the first quarter rose 5% to 366 tonnes, while gold jewellery demand increased 31% in value to $47 billion.
Watches can contain anywhere from a sliver of gold to more than 200 grams, meaning scrap values can run into tens of thousands of dollars. In the example of the Omega Constellation, the gold is present in the watch case and the strap. With industry expectations that gold could reach between $5,400 and $6,300 an ounce this year, pressure to dismantle non-collectible pieces is likely to continue, particularly for traders that must cover refurbishment, marketing and warranty costs when reselling timepieces.
Overproduction and unsold inventory
Traders say that some new watches are also being stripped when they sit as unsold inventory. Lamdin observed: "I've seen a lot of totally mediocre watches get melted down. There's a lot of unsold overstock in the Swiss market. And those watches are basically brand new, unworn, and they're just getting stripped down... they made too many of them." He added a note on cultural losses: "But when you have something that's vintage and rare and has some story or some patina, that's where it becomes a short-sighted tragedy."
Industry experts note that brands which tightly control production - such as privately owned Patek Philippe and Rolex - maintain premiums over melt value and are therefore less likely to see models disappear into bullion. For those brands, resale levels can be high and sustained. However, less exclusive names including TAG Heuer, Breitling and Omega find it harder to command similar retail premiums because buyers can often obtain nearly equivalent models on the secondary market for significantly less.
Simon Lazarus, head of PR and content at online luxury watch platform Chrono Hunter, said for some of the most desirable models "the wait lists are astronomical. You're talking anything from two to eight years." Citing research from Vontobel, industry data showed Rolex accounted last year for 61% of the sales value of new Swiss watches priced above 3,000 Swiss francs ($3,770), up from 57% in 2023 despite lower volumes.
Three industry experts interviewed said models with weaker resale profiles - examples include the Omega Speedmaster among others - often depreciate sharply once sold, leaving them exposed to scrapping when the metal inside becomes more valuable than the watch as a collectible or wearable item.
Decisions for owners
For some owners, higher gold prices have prompted sales. Retired New York engineer Mitchell Talisman sold two gold watches and a chain in December that together contained 35 grams of gold with 58% purity, receiving $2,660 in cash. He said the items had sat in a safety deposit box for over a decade.
Other owners refuse to part with pieces at any price because of sentimental value. Hailwood explained: "It may be a family piece, it may be their first watch. They don't like the idea of it being destroyed, so they keep it." That sentiment acts as a counterweight to market forces for some proportion of watch owners.
Data and currency notes
There are no official figures quantifying how many luxury watches are being melted for bullion. The data points that are available include World Gold Council figures on rising gold recycling and jewellery demand. Currency conversion notes used in reporting were: ($1 = 0.7421 pounds) and ($1 = 0.7873 Swiss francs).