Luxury watches are designed to be worn, admired and, in many cases, passed down through generations. But as gold prices remain near historic highs, some are now being valued less for their craftsmanship than for the metal inside them.

Omega’s Constellation has appeared in films, advertising campaigns and on red carpets, including the Met Gala. Many celebrities have helped turn the model into a symbol of luxury and glamour. Yet some older gold versions of such watches are now being sent to the furnace, according to a report by Reuters.

Gold touched a record $5,600 an ounce in January before easing to around $4,200. Even after the pullback, prices remain almost twice their 2024 average. The rally has pushed the value of the gold in some vintage watches above what the complete timepiece can fetch in the second-hand market.

According to the Reuters report, used models from brands such as Omega and TAG Heuer are among the most exposed. Highly collectible watches from Rolex and Patek Philippe remain better protected by scarcity and stronger resale demand.

When gold becomes more valuable than the watch

In May, British precious-metals dealer Jon White received an 18-carat Omega Constellation made in the late 1970s.

The watch was in excellent condition. But White, who runs Gold Traders and also manages an auction house, found that it was worth more as scrap.

The gold in the watch was valued at £5,750, or about $7,749. The complete watch was expected to fetch only £4,000-£4,500 at auction. Its gold was therefore worth about 35% more than its likely resale price, White told Reuters.

White said he had scrapped dozens of mainstream luxury watches this year as demand for investment gold increased.

Luxury watches can contain anything from a small amount of gold to more than 200 grams. The metal may be present in the case, bracelet or both. Depending on weight and purity, the scrap value can run into tens of thousands of dollars, Reuters reported.

Mainstream luxury brands face greater risk

Contemporary pre-owned watches and older models that have not yet become collectibles are the most vulnerable, James Lamdin, founder of Watches of Switzerland’s second-hand unit Analog Shift, told Reuters.

Brands such as Omega, TAG Heuer and Breitling often trade at large discounts in the used market. Some Omega Speedmaster models, for instance, lose significant value after their initial sale, industry experts told the news agency.

Dealers also have to account for servicing, operating costs and warranties before reselling a watch. When these costs are added, melting the watch can become the more attractive commercial option.

Unsold inventory may also be affected. Lamdin said some new and unworn watches from excess Swiss stock were being dismantled because the watchmakers had simply made far more watches than what the market could absorb at the time.

He said melting ordinary, mass-market watches was less concerning than losing rare vintage pieces with a distinctive history or appearance.

The destruction of historically significant or uncommon pieces, however, has alarmed watch specialists. 

Historian Adrian Hailwood told Reuters that once a watch with a distinctive history, ageing pattern or rare design is melted, its value as a complete cultural and mechanical object is permanently lost.

Rolex and Patek protected by scarcity

The economics are different for watches from brands such as Rolex and Patek Philippe.

These companies tightly control production, helping their watches retain a substantial premium over the value of the gold they contain, industry experts told Reuters.

Waiting periods for some models can range from two to eight years, according to Simon Lazarus of online luxury-watch platform Chrono Hunter.

Reuters cited Vontobel estimates showing that Rolex accounted for 61% of the sales value of new Swiss watches priced above 3,000 Swiss francs last year. Its share was up from 57% in 2023 despite lower sales volumes.

Scarce watches with strong collector demand continue to trade as luxury assets. Less collectible gold watches are increasingly being valued as raw material.

Scale of recycling 

There are no official estimates for the number of luxury watches being melted, Reuters reported.

However, World Gold Council data cited by the news agency showed that global gold recycling rose 5% to 366 tonnes in the first quarter. The value of gold-jewellery demand increased 31% to $47 billion.

Industry analysts interviewed by Reuters suggest that the pressure could continue if gold prices rise again.

For watch owners, the decision is not always financial.

A watch may be a family heirloom, a gift or the owner’s first major purchase. That emotional attachment may save some pieces.

But for watches without sentimental or collector value, the gold rally is changing the calculation. A luxury timepiece can now be worth more for its metal than for its name, history or machinery.