Why do the precious metal models lose the most value?

[DWdrummer]

Im confused here a bit. I know the sport models rule for popularity. I just dont get how the models with the most intrinsic value, which is that of the weight of their precious metals fall the fastest and hardest. I hear they are also more heavily discounted when purchased new as well. Why is that?

Lets face it, we all LOVE Rolex watches or we wouldn't be here. However a sport model while all in house made is still only stainless steel. Albeit very high quality stainless steel, but stainless steel none the less.

Now you take a YG Day Date, and its what? 4.7 troy ounces of 18K gold. At today's prices at scrap weight its worth about $5-6k USD for scrap alone.

Platinum is even heavier, I think they are 200+ grams of .950 Platinum goodness. I know we are not paying for just the precious metal value in sheer weight, cause its a lot more than that, that these models all cost even pre owned.

Anyway I was wondering about all this tonight.

[ParisDakarBmw]

The mark up for the model is too much. They get about $5.5k per model of new GMT in profit.

That is basicly what it cost to make a gold watch. They make $10k to $15k, for every gold watch they sell. Why wouldn't they mark it up as high as they can go?

We pay it, so they charge it.

[toph]

the higher the mark up ( precious metals in this case) the more the value of an average model will fall. Simple rules of economics

[TurboWatch]

less demand in the "pre-loved" market.

[Tools]

All gold jewelry takes a hit..

....just try to sell your wife's diamond tennis bracelet.........


The "value" of the precious metal in jewelry is practically irrelevant on the used market

[Rscmaine]

Here's a neat breakdown of the gold in an older 18038 model -

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.


Guide ID: 10000000001632748Guide created: 08/17/06 (updated 01/02/10)

Using todays prices the "melt value" on that weight of gold is $2727 at todays $1130 price.

The comparable watch retailed at $24000 give or take.

It is no great surprise that the secondary market would discount this substantially.