By Daniel Pieciak
This, my second article for Wrist Review, is a real challenge for me as it’s about two industries that I am genuinely passionate about – watches and gold. A bullion merchant by trade, and a watch trader by passion, I have spent years researching and studying to understand the pricing, margins, and profits of all parties involved.
When choosing a watch to compliment my collection, I mostly search for a piece that is either all gold, has a gold case or at least contains gold elements in it. It comes from the mindset that watches with gold are easier to sell – wherever in the world I might be at the time – and in the worst case scenario I will at least get scrap value on it. This is the main reason why I always bring at least one gold watch with me when I go for a holiday, and keep it away from all my other belongings.
In my moderate 64 watch collection, 41 of them are at least partly gold, ranging from very basic Sovereign 9ct quartz, weighing as little as 36g, through a vintage 14k Rolex date on rivet bracelet weighing just above 60g, ending at the hefty 138g 18k Audemars Piguet Royal Oak, and an iced-out 50 Cent style 18k white gold Rolex day-date.
I have bought each pre-owned, for the very same reason I am writing this article – refusal to pay prices that are disconnected from reality by taking advantage of the lack of knowledge of the average Joe.
The pricing of brand new watches that have gold in them is a source of frustration for me. It appears that ALL top watch manufacturers’ calculators malfunction when the magic word ‘gold’ appears in the spec.
Let’s take Rolex for an example. Next time you are walking past your local jeweller, instead of going ‘Wow! That’s expensive!’ when looking at the price of new day-date, look at prices of the same model in a different spec, compare the difference and try to work out why it is so much more. The mentioned day-date 2 in 36mm mid-size, all gold, costs at the moment around 21k GBP. The very same model, but with an alligator strap, costs just under 16k. So we are paying 5k more just for the gold strap, whereas the value of gold on the very same strap is under £1500. The cost of making the gold strap as a manufacturing process is by no means higher than making the alligator strap including the skin, so what are we paying £3500 for?
Let’s look at other models ¬ Rolex Daytona SS/gold ¬ £11k, Rolex Daytona all rose gold ¬ 25k. The value of extra gold – around £2500. So we are taken for an even bigger ride here than with the day-date, paying an extra 12k for what exactly? And on top of that, I am valuing the cost of SS elements on the bracelet of a cheaper model at £0 (!). GMT Master 2. All Stainless Steel ¬ 6k, Stainless Steel with Gold ¬ £8650. Extra gold value ¬ under £800. Thank you Rolex, this time you are only trying to coax me out of just under 2k.
You might think ok, this is just the Rolex way of pricing things up. No, it’s not. All other manufacturers are at it. New Omega Deville on leather strap, Stainless Steel case ¬ 3k, gold case ¬ £6200. Extra gold value ¬ £400.