Gold and Rolex

[Vivalas]

Gold prices are 40% off their peak and some are predicting it to go below $1,000. The dollar is also soaring ($1.58 to the £ and not long ago was $1.70). All the signs are for falling precious metal prices.

Over the last few years I've heard people say (many pre owned dealers granted) that gold and bi metal Rolex watches have risen in the pre owned markets partly due to the value of the precious metal itself. Well maybe it was partly true and maybe it was hype, but good as a sales pitch none the less.

So if gold keeps falling and falling, in theory the same should happen with the watches. Whilst I doubt it will for many reasons, it will be interesting to see if there's any change over the long term.

As for Rolex themselves, I wonder if they will take advantage of this and increase their stock. In theory they will be able to make their watches for less and increase their margins quite substantially.

I won't hold my breath waiting for them to discount

[rmfnla]

Actual metal content has very little to do with the prices of precious metal Rolexes...

[locutus49]

Here is how it works: If gold (for example) goes up, Rolex, Patek, etc. raise their prices accordingly. If gold drops in price, luxury watch makers either hold their prices stable or raise them.

They probably are buying gold and platinum to hedge against eventual rise in prices.

[Keith1]

This may be part of the reason why there has not been a price increase since June 2012!

[scimps]

Not rolex but I believe ap dropped the rrp off their gold models 2 years ago in UK to compensate

[Vivalas]

Originally Posted by rmfnla

Actual metal content has very little to do with the prices of precious metal Rolexes...

I'm aware that's the case, however my comment was that I've heard people use that to justify increases, but I bet that won't work the other way

[Vivalas]

Originally Posted by Keith1

This may be part of the reason why there has not been a price increase since June 2012!

That could well be part of it. I think the main reason though has been the stability of the Swiss franc.

[Tools]

Originally Posted by Vivalas

I'm aware that's the case, however my comment was that I've heard people use that to justify increases, but I bet that won't work the other way

Sellers will use any excuse to try and get the most out of a buyer.. error dials, gold content, parachrom hairspring, "rare", and on and on...

Once a higher base value is established they all jump on the bandwagon. The only thing that brings down used prices is when buyers no longer pay the price.. as long as there are buyers paying, there will be sellers selling..

[tkerrmd]

Agree gold price has nothing to do with watch price.

[Rickn]

As a would be buyer I'd love if gold watch prices plummeted. As a hypothetical gold watch owner I'd be furious if they cut their prices.

[SALTY]

When a Camel farts in the Middle East and crude prices trade lower, the mantra is, "that's thousands of miles away and that's crude oil, crude oil that has to be shipped by tanker, halfway around the world, then offloaded and stored, then refined into a usable petroleum product, then stored again, then shipped to a retailer, then stored again, then dispensed to a retail (ELU) user. This takes time - it could be months before any price drop is realized."

When a camel farts in the Middle East and crude prices trade higher, prices here at the pumps, thousands of miles from the Camel's butt, rise immediately - even before the proverbial air clears.

[Racerdj]

The current gold price does not affect my daily enjoyment of the gold Rolex I am wearing. I hope for stable prices.

[sturgeon123456]

Gold and Platinum are still a desirable precious metal (in the jewelry world) and there is a status that comes with that....as well as a higher price of admission.

When gold was rising years ago Rolex did hike up the PM models quite a bit. Now you see them holding steady even though inflation is a factor.

I think there is some correlation to PM prices and Rolex MSRP but it will always be to the benefit of Rolex. Plus who knows how much their average price is per kilo over the last 5 years, could be higher than the value of gold or platinum at todays spot price.

[otisc]

Found this online. It is old, obviously, and assumes a $400 spot price on gold. Right now, it is roughly 3x times that ($1141, or 2.85 times more). Their result, adjusted for today's gold prices, equals about $2744 worth of gold in the Day-Date. The sport watches have more substantial frames, however I doubt there is more than twice as much in those, either.

Ever Wondered How Much Gold Is Really In Your Rolex?

The solid gold Rolex watch is really a thing of beauty. The typical gents Rolex President looks rather impressive due to its obvious mass and weight not to mention the price tag that goes with it. But did you ever really wonder what the actual gold value is in a Rolex President? Below we have taken an 18kt. gold Rolex and have removed the movement, the crystal and other non-gold parts. We weighed each part using a laboratory grade scientific balance. We are sure you will find the results very interesting. All values were based on the spot price of gold at $400.00 per troy ounce.

All precious metals are weighed using the troy system. One troy ounce contains 31.1 grams of a particular precious metal. There is 480 grains in one troy ounce. If the spot price of gold is $400.00 per troy ounce, the value per gram would be $12.86. Using these standards, the actual gold value in the Gents Rolex President would be $963.27.

These are the basic component parts of the Rolex. The band, the bezel ring that holds the crystal in place, the main case, and the case back.

Inside of the case back you will see that it is marked as being 18kt. It also has the decimal value of .750. This means that 75 percent of the weight is pure gold. Pure gold is 24kt. The pure gold is alloyed with silver, copper, and zinc. Also notice the official Rolex markings on the inside of the case back.

The clasp is also marked with the gold content as well as being marked with the Rolex logo. There is also a number that is the official part number for this band. This band has the bark finish.

This is the head or case ring of the Rolex. It is also marked 18kt. A genuine Rolex case will also have a Registered Design number engraved between the lugs at the 12 position. In this case, the number is 1803. Between the lugs at the 6 position you will find the serial number of the case. If you look close at this picture, you can see how Rolex machines out the lug ends and the case walls to reduce the amount of gold used to manufacture the case.

Using these parts the actual gold value of this Rolex can be determined as follows.

Case ring weights 18.5 grams. Contains 13.875 grams of pure gold. It has a value of $178.43.

Case back weighs 7.21 grams. Contains 5.41 grams of pure gold. It has a value of $69.57.

Bezel weighs 5.30 grams. Contains 3.98 grams of pure gold. It has a value of $51.18.

The bracelet weighs 68.85 grams. Contains 51.64 grams of pure gold. It has the most value at $664.09.

The total value of the pure 24kt. gold in this Rolex President is $963.27.

[otisc]

Accidental double post, apologies.

[VICI]

I wouldn't hold my breath for Rolex to lower the msrp.

[DJ TT 2002]

Originally Posted by rmfnla

Actual metal content has very little to do with the prices of precious metal Rolexes...

An impressive grasp of the obvious
The prices are what the market will bear, nothing more and nothing less.
People will always want gold IMHO

[Headshrinker]

If Rolex is like most other gold commodities, they hoard gold, and still possess gold from when it was only several hundred dollars an ounce. So when they buy gold at higher prices, their bottom line is still well below today's price. Business is business.

[Chaching]

Gold prices have zero to do with the cost of a Gold Rolex.

[rmfnla]

Originally Posted by DJ TT 2002

An impressive grasp of the obvious
The prices are what the market will bear, nothing more and nothing less.
People will always want gold IMHO

Econ 101; just what we needed...

[dpa94114]

great article...thanks

[DJ TT 2002]

Originally Posted by rmfnla

Econ 101; just what we needed...

Such a witty riposte!!! Unseen since the days of the Algonquin round table. I'm in the presence of greatness :r ofl::rof l:

[rmfnla]

Originally Posted by DJ TT 2002

Such a witty riposte!!! Unseen since the days of the Algonquin round table. I'm in the presence of greatness :r ofl::rof l:

If you say so...

[locutus49]

Nice Algonquin reference. Dorothy Parker would have been proud.

Originally Posted by DJ TT 2002

Such a witty riposte!!! Unseen since the days of the Algonquin round table. I'm in the presence of greatness :r ofl::rof l:

[DJ TT 2002]

Originally Posted by locutus49

Nice Algonquin reference. Dorothy Parker would have been proud.

Thank you, kind sir.

[vman]

Chances are that companies like Rolex buy gold futures so they hedge against the price of gold. Also, luxury companies focus on value pricing, i.e., they set the price that you're willing to pay because of the perceived value which in this case is not utilitarian but social (or psychological). As long as you're willing to pay the price, they'll take your money.

[ILOVEIT]

I guess almost $2,000-an-ounce-times are over. I think we won't see more than $1,500 within the next 5 or 10 years.

[707soldier]

Originally Posted by otisc

Found this online. It is old, obviously, and assumes a $400 spot price on gold. Right now, it is roughly 3x times that ($1141, or 2.85 times more). Their result, adjusted for today's gold prices, equals about $2744 worth of gold in the Day-Date. The sport watches have more substantial frames, however I doubt there is more than twice as much in those, either.

Ever Wondered How Much Gold Is Really In Your Rolex?

The solid gold Rolex watch is really a thing of beauty. The typical gents Rolex President looks rather impressive due to its obvious mass and weight not to mention the price tag that goes with it. But did you ever really wonder what the actual gold value is in a Rolex President? Below we have taken an 18kt. gold Rolex and have removed the movement, the crystal and other non-gold parts. We weighed each part using a laboratory grade scientific balance. We are sure you will find the results very interesting. All values were based on the spot price of gold at $400.00 per troy ounce.

All precious metals are weighed using the troy system. One troy ounce contains 31.1 grams of a particular precious metal. There is 480 grains in one troy ounce. If the spot price of gold is $400.00 per troy ounce, the value per gram would be $12.86. Using these standards, the actual gold value in the Gents Rolex President would be $963.27.

These are the basic component parts of the Rolex. The band, the bezel ring that holds the crystal in place, the main case, and the case back.

Inside of the case back you will see that it is marked as being 18kt. It also has the decimal value of .750. This means that 75 percent of the weight is pure gold. Pure gold is 24kt. The pure gold is alloyed with silver, copper, and zinc. Also notice the official Rolex markings on the inside of the case back.

The clasp is also marked with the gold content as well as being marked with the Rolex logo. There is also a number that is the official part number for this band. This band has the bark finish.

This is the head or case ring of the Rolex. It is also marked 18kt. A genuine Rolex case will also have a Registered Design number engraved between the lugs at the 12 position. In this case, the number is 1803. Between the lugs at the 6 position you will find the serial number of the case. If you look close at this picture, you can see how Rolex machines out the lug ends and the case walls to reduce the amount of gold used to manufacture the case.

Using these parts the actual gold value of this Rolex can be determined as follows.

Case ring weights 18.5 grams. Contains 13.875 grams of pure gold. It has a value of $178.43.

Case back weighs 7.21 grams. Contains 5.41 grams of pure gold. It has a value of $69.57.

Bezel weighs 5.30 grams. Contains 3.98 grams of pure gold. It has a value of $51.18.

The bracelet weighs 68.85 grams. Contains 51.64 grams of pure gold. It has the most value at $664.09.

The total value of the pure 24kt. gold in this Rolex President is $963.27.

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