Are our Stainless watch values affected by the Gold "bubble?"

[TimRolex]

So I was thinking today about the prices of some of my favorite stainless steel model Rolexes, and a thought occurred to me which I thought some of you good folks could help give a little perspective to. Forgive me if this topic has been discussed previously, please don't run me out of town.

As we know, Rolex frequently increases prices on their model lineup from year to year, just like many brands in many industries. But I would venture to guess that Rolex is affected as much as almost any other company on Earth by the fluctuations in the price of gold, since so many of their cases/bracelets/bezels/etc. are partially or fully made of the substance and they build so many of them.

As the prices for gold have risen so quickly over the last ten years or so, obviously we can't fault Rolex for raising its prices on the gold models accordingly. But when I looked at a retail price chart for the last ten years, it seemed the pricing for stainless models increased at a rate very similar to their gold counterparts. Does this mean we are "overpaying" for stainless watches? Does Rolex suspect that if the gap were to widen between gold and stainless models it would make the gold watches less attractive to buy? Would that be a bad thing for Rolex or for gold model owners? Is the recent correction in the price of gold over the last 18 months or so the reason we didn't see an across the board price increase last year? If gold prices continue to fall, how will that affect the value of our stainless models?

Please understand I am not asking for investment or speculation purposes...just a thought that occurred to me. What are your thoughts?

[richard371]

I have never understood the desire and interest in gold watches. My Italian/Persian/Asian friends love them but they just don't work for me. I would take 10 nice SS watches over 1 or 2 gold/Pt ones any day. Yes gold is a precious metal and a sign of wealth but thats not why I love watches, I would rather it be in coins or bullion in the bank. Gold has dropped a bit/stabilized at around $1250 over the last year so hopefully prices over all will level out a bit.

[jjnd08]

I don't think it does. The markup of gold in jewelry is already so high that the spot price would have very little affect.

[tkerrmd]

Originally Posted by richard371

I have never understood the desire and interest in gold watches. My Italian/Persian/Asian friends love them but they just don't work for me. I would take 10 nice SS watches over 1 or 2 gold/Pt ones any day. Yes gold is a precious metal and a sign of wealth but thats not why I love watches, I would rather it be in coins or bullion in the bank. Gold has dropped a bit/stabilized at around $1250 over the last year so hopefully prices over all will level out a bit.

Not "Italian/Persian or Asian" and completely disagree
The weight look and feel of the precious metal watches is very special, I know many love and own them and they wouldn't even consider themselves "wealthy" they just appreciate quality and are good with money

To the OP... No

[DrTom]

according to my ad, theres not much margin on ss rolexs, but lots on the ones with some portion/all gold.....so thats where the discount is.....the prices don't seem to approximate the spot price on gold, but can be used to pump up the price.....i will by a gold watch (my yacht master is gold and ss) but probably as special occasion watch....but to me, an all gold sport watch is a bit of a contradiction....but an all gold dd or daytona....it could work....

[coralfarmer84]

I believe there is some truth behind your thought process. Only makes sense to increase prices across the board. However I feel that Rolex increases it's prices based on what they feel they can get, and if they can sell the same amount of watches for x amount of dollars more than before why wouldn't they

[TimRolex]

Since the price increase, as a percentage, seems very similar between gold and stainless models, and we know that gold has SKYROCKETED over the last 10 years, wouldn't that indicate that the price AS COMPARED to the cost of materials and labor (if we agree that the labor for building a gold and stainless watch of the same variety are equal) for the stainless watch is at a much higher margin?

[Joearch]

Face it, we are overpaying for all luxury watches. How much do you think it cost Rolex to make a Sub C or GMT? Not $8500... Not even close. They cost that much because the demand is there. Pure and simple.

[kilyung]

Originally Posted by TimRolex

But I would venture to guess that Rolex is affected as much as almost any other company on Earth by the fluctuations in the price of gold, since so many of their cases/bracelets/bezels/etc. are partially or fully made of the substance and they build so many of them.

Less than you think. Rolex buys more gold than they need and that protects them somewhat from price fluctuations over the long run.

[911SC]

From what i've read 904L is not cheap, Rolex buy's tons literally, and if Rolex finds any flaw, a trace of magnesium etc. they send it back. So in my opinion our SS watches also consist of a "special, precious" metal.


Sent from Mars

[coralfarmer84]

Costs of employees, advertising, equipment far exceed the material cost. Shipping fees have also gone up dramatically with gas prices in the last ten years

[HL65]

Originally Posted by tkerrmd

Not "Italian/Persian or Asian" and completely disagree
The weight look and feel of the precious metal watches is very special, I know many love and own them and they wouldn't even consider themselves "wealthy" they just appreciate quality and are good with money

To the OP... No

Agree my friend and to me a silly post by Mr. Typecast

Also to the OP...No!

[911SC]

Originally Posted by richard371

I have never understood the desire and interest in gold watches. My Italian/Persian/Asian friends love them but they just don't work for me.

The more gold the better imo! life is too short not to... I can't wait to sport a gold Sub, GMT, or YM ll. Heck, was even looking at getting an all gold YM l with the white dial and ruby markers, but that dial was the deal breaker, not for me But hey if gold doesn't work for you than that's cool, to each their own.

[BLACKHORSE 6]

Originally Posted by coralfarmer84

I believe there is some truth behind your thought process. Only makes sense to increase prices across the board. However I feel that Rolex increases it's prices based on what they feel they can get, and if they can sell the same amount of watches for x amount of dollars more than before why wouldn't they

This. It's all about supply and demand, no matter what metal the watch is made from.

[iazrollie]

Prices move higher as the company tries to offset the strong CHF.