Amidst the high uncertainty relating to the Covid-19 pandemic, the price of gold has set a record by rising to nearly £1,501 per ounce. Well, it’s no surprise that demand for gold typically shoots up in times of catastrophe. But the question is – will the surge in gold price influence the prices and demand of gold luxury watches? If yes, then how?
Let’s first take a quick glimpse of the luxury watch industry.
The Industry of Luxury Watches
If you browse the catalogue of different elite watchmakers, a few things you will notice in common. Highly complicated timepieces cost more than standard models. No doubt, the watches embellished with gemstones or diamonds come with the heftiest price tags.
Interestingly, platinum watches cost more than their gold counterparts. For watch naives, it might be surprising. But the fact is that these trends have been consistent throughout the horology industry.
A watch’s value is always greater in comparison to the value of the raw material used in constructing it. The precious metals have their market rates. Furthermore, various factors govern the prices of the precious metals that have no association with the luxury watch industry.
Nonetheless, the current prices of the metals used in a watch’s construction influence the demand for watches in some way.
How Price of Gold Regulates the Price of Gold Luxury Watches?
The retail prices of luxury watches do not solely depend on the cost of the precious metal used in making them. But substantial alterations in gold prices have influenced the price along with the demand of many gold timepieces in the pre-owned market.
The value of a Rolex Day-Date President will be more than its gold’s weight. This means that if you sell a Rolex President, it will fetch you more as a watch. But the synopsis is different for many vintage timepieces, especially pocket watches whose value is less as a watch. And their gold parts are worth more.
Moreover, many of these timepieces are not in existence any longer. Thus, while the price of gold surged, people scrapped these watches for their precious metal.
On the contrary, if there are any alterations in gold prices, it can significantly impact on the demand for gold luxury watches in the retail as well as second hand market.
Effects of Gold Price on Gold Rolex Watches
The Rolex Day-Date President Reference 128238 made of 18ct yellow gold costs about £25,613 in the retail market. The price remained the same between January 2020 and September 2020. But gold price escalated from about £1,182 to £1,942 per ounce between January 2nd and September 2nd 2020.
Now, whether you bought the watch in January or September, the price you would have paid is no different. But the added markup paid above the watch’s raw material cost reduced by over £308 for per ounce of gold in it.
However, while the market prices for gold increased, the demand for gold timepieces also increased. Of all gold Rolex watches, yellow gold references enjoy the biggest craving. Many famous yellow gold Rolex models like the Submariner and Day-Date 40 sell extremely quick compared to others.
Today’s surge in gold prices may not influence the price that you will have to pay for a gold timepiece. But it will significantly modify the value of what you have secured.
Popular & Desirable Gold Rolex Watches
Rolex is one of the most popular luxury watchmakers in the world. And as you can expect, the brand’s catalogue consists of a wide number of gold timepieces. Rolex is undoubtedly more recognised and admired as a high-end tool watch manufacturer. But the brand has a long, fascinating history of creating solid gold watches.
Gold is an expensive metal, but its ability to resist corrosion made it extremely suitable to use for watch cases. If you look back nearly half a century, you will find that alloys of steel were not advanced as much as they are now.
Thus, several manufacturers employed gold to forge out their watches’ case, keeping in mind the metal’s power in offering resistance to corrosion and pitting.
However, two of the most famous and coveted gold Rolex watches are –
Rolex Day-Date President
The current Day-Date watches are available in two case sizes of 36mm and 40mm. The bezel options include fluted, smooth or gem-set. Moreover, Rolex equipped the Day-Date watches with the Calibre 3255 and the iconic President bracelet.
Rolex Cosmograph Daytona
The Rolex Daytona comes with a 40mm gold case and tachymeter bezel. The watches are powered by the Calibre 4130 movement and available in two bracelet choices – Oyster and Oysterflex.