Omega’s Constellation has long been sold as a symbol of luxury and glamour, appearing in campaigns, movies and at the Met Gala on stars such as George Clooney and Nicole Kidman.
Now, some such classic watches are being melted down.
With gold prices near record highs struck in January, the value of the metal inside some vintage and used luxury watches is outstripping what they can fetch in the resale market. That is sending some mainstream models, including those by Swatch-owned Omega and LVMH’s TAG Heuer, to the scrap furnace.
Reuters interviews with over a dozen traders, industry experts, and investment advisors show that used models by brands like Omega and TAG Heuer are among those most exposed to the trend. The pressure is strongest where the watch is not rare enough to command a collector premium, but contains enough gold to make dismantling profitable.
British dealer Jon White of Gold Traders melted down an 18-carat late-1970s Constellation in excellent condition in May. It was 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 that Constellation was worth 5,750 pounds ($7,749), White said. That was 35 per cent more than its estimated 4,000-4,500 pounds auction value.
When gold beats the watch
The arithmetic has changed because bullion has moved faster than the second-hand watch market.
Used-watch prices have not followed that move. A watch that once sat safely above its melt value can now become vulnerable if collector demand is weak, repair costs are high or a dealer must factor in warranty expenses.
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.”
“I find it very sad, because obviously once something has been melted, it’s gone forever,” said Adrian Hailwood, a specialist in horological history.
Why some brands are safer
A luxury watch’s fate depends on more than the name on the dial. 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.
But if the watch is scarce, culturally important, or backed by a strong collector market, its resale price can still sit comfortably above melt value. High-end brands that tightly manage new production, such as 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 per cent of the sales value of new Swiss watches priced above 3,000 Swiss francs ($3,770), up from 57 per cent in 2023 despite lower volumes, according to Vontobel.
Less exclusive brands such as 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 such as Omega’s Speedmaster often depreciate sharply once sold, exposing them to scrapping, three experts said.
The overstock problem
The pressure may not be limited to older watches.
With gold expected to reach between $5,400 and $6,300 an ounce this year, the incentive to dismantle some watches will continue, especially where traders that resell them must cover costs and provide warranties.
New watches that are overproduced 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 shortsighted tragedy.”
That distinction is central to the resale trap. A gold watch may look like a luxury object, but if the market sees it as common, damaged, costly to service or outside collector fashion, its gold content can set the floor. Once that floor rises above its resale price, the watch becomes a commodity.
To sell or hold
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 per cent 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.”
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.
For collectors, the lesson is blunt: Gold content is no longer just a feature of a watch. In a market where bullion has nearly doubled from its 2024 average, it can become the price that decides whether the watch is preserved, traded or melted down.
(Original reporting by Alessandro Parodi and Ben Makori for Reuters)
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