By Alessandro Parodi and Ben Makori
LONDON, June 13 (Reuters) – Omega’s Constellation watch has been flashed in campaigns, movies and at the Met Gala by stars like George Clooney and Nicole Kidman, turning it into a symbol of luxury and glamour.
But with gold prices near record highs struck in January, some such classic watches are being melted down as the value of their metal content outstrips their resale worth.
Used models by the likes of Omega and LVMH’s TAG Heuer are most hit by the trend, according to Reuters interviews with over a dozen traders, industry experts, and investment advisers.
British dealer Jon White of Gold Traders melted down an 18-carat late-1970s Constellation in excellent condition in May, one of dozens of mainstream luxury watches he has had scrapped this year as demand for investment gold has risen.
“Beautiful watch. But in reality, had the customer consigned that to auction, what would they have achieved?” White, who also manages an auction house, told Reuters.
The gold content of the Constellation watch, one of many models produced by Swatch-owned Omega, was worth £5,750 ($7,749), 35% more than its estimated £4,000-4,500 auction value, White said.
James Lamdin, founder of Watches of Switzerland’s second-hand unit Analog Shift, said melting was “primarily happening with contemporary pre-owned and also with older vintage watches that are not already collectible.”
Spokespersons for Swatch and Rolex said they would not comment for this story. LVMH, Richemont, Patek Philippe and Audemars Piguet did not respond to requests for comment.
LIQUID GOLD
Gold prices surged to a record $5,600 an ounce in January as geopolitical concerns and trade worries pushed investors towards safe-haven precious metals. Gold now hovers around $4,200 per ounce, almost double its 2024 average.
The market price for used watches has not moved in the same way, however.
“I find it very sad, because obviously once something has been melted, it’s gone forever,” said Adrian Hailwood, a specialist in horological history.
There are no official figures showing how many luxury watches are being melted. World Gold Council data shows overall gold recycling in the first quarter rose 5% to 366 tonnes, while gold jewellery demand rose 31% in value to $47 billion.
Watches can hold anything from a sliver of gold to more than 200 grams, meaning their scrap value can run into tens of thousands of dollars. In an Omega Constellation, the gold can be found in the case and the strap.
With gold expected to reach between $5,400 and $6,300 an ounce this year, the pressure to dismantle some watches will continue, especially as traders that resell them must cover costs and the expense of providing a warranty.
New watches that are over-produced might also be melted down.
“I’ve seen a lot of totally mediocre watches get melted down,” said Lamdin. “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.”
“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.”
THE RESALE TRAP
High-end brands that tightly manage new production like privately owned Patek Philippe and Rolex command the highest premiums over melt value, three industry experts said.
For some models “the wait lists are astronomical. You’re talking anything from two to eight years,” said Simon Lazarus, head of PR and content at online luxury watch platform Chrono Hunter.
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, according to Vontobel.
Less exclusive brands like TAG Heuer, Breitling and Omega struggle to command high new retail prices, however, as buyers can buy a second-hand timepiece for much less.
Models like Omega’s Speedmaster often depreciate sharply once sold, exposing them to scrapping, three experts said.
TO SELL OR NOT TO SELL
Higher gold prices motivated retired New York engineer Mitchell Talisman to sell two gold watches and a chain containing a combined 35 grams of gold with 58% purity for $2,660 cash in December.
“I’d had a bunch of stuff sitting in a safety deposit box for over 10 years,” he told Reuters.
For some owners however, the idea of selling a watch only for it to be melted by a dealer is too much to bear.
“It may be a family piece, it may be their first watch,” said Hailwood.
“They don’t like the idea of it being destroyed, so they keep it.”
($1 = 0.7421 pounds)
($1 = 0.7873 Swiss francs)
(Reporting by Alessandro Parodi in Gdansk, Editing by Lisa Jucca and Alexandra Hudson)
