Gold Fever Melts Luxury Watches as Metal Trumps Craft

Gold prices have nearly doubled from their 2024 average, creating an unprecedented market dynamic where the precious metal inside luxury watches is worth more than the timepieces themselves. Across China and global markets, once-cherished luxury watches — particularly mid-range gold models from Omega, TAG Heuer, and Breitling — are being melted down for bullion, sparking a fierce debate between pragmatists capitalizing on high gold prices and collectors who view the destruction as a cultural tragedy.

The Numbers Behind the Melt

Gold surged to a record $5,600 per ounce in January 2026, driven by geopolitical tensions, trade uncertainties, and sustained central bank buying. While prices have since moderated to around $4,200 per ounce as of mid-June, that still represents nearly double the 2024 average of approximately $2,800, according to Reuters.

The secondary market for used watches, however, has not kept pace. A late-1970s Omega Constellation in excellent condition, for example, contained gold worth £5,750 ($7,750) — 35% more than its estimated auction value of £4,000 to £4,500. British dealer Jon White of Gold Traders melted down exactly such a watch in May, one of dozens he has scrapped this year.

“Beautiful watch. But in reality, had the customer consigned that to auction, what would they have achieved?” White told Reuters.

Who Is Affected — and Why

The melting trend is not uniform across the luxury watch market. High-end brands like Patek Philippe and Rolex that tightly manage production continue to command premiums well above melt value. Rolex has even raised prices twice in 2026 — by 4-9% in January and another 5% in June — reflecting higher raw material costs, especially for gold.

But mid-range luxury brands face a different reality. Models from Omega, TAG Heuer, and Breitling often depreciate sharply once sold, making them prime candidates for scrapping. James Lamdin, founder of Analog Shift, the second-hand unit of Watches of Switzerland, told Robb Report that the phenomenon is “primarily happening with contemporary pre-owned and also with older vintage watches that are not already collectible.”

Lamdin added: “I’ve seen a lot of totally mediocre watches get melted down. 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.”

Refineries Overwhelmed

The volume of gold being recycled has strained the industry’s infrastructure. World Gold Council data shows overall gold recycling rose 5% to 366 tonnes in the first quarter of 2026, while gold jewelry demand surged 31% in value to $47 billion. In the United States, refineries became so overwhelmed that some had to pause payments and stop accepting new trade-ins for two weeks.

Adam Golden, founder of Miami-based vintage watch dealer Menta Watches, described the situation: “Since the price shot up, the major refiners doing $50 million a day in gold have been so backlogged that they had to close down operations for two weeks. They won’t accept any more gold until they can catch up on payments.”

The Chinese Market Perspective

China, the world’s largest gold consumer and a major luxury watch market, is at the center of this trend. The domestic gold recycling market has grown significantly, with its 2026 market size exceeding 310 billion RMB. Beijing alone saw a 35% year-on-year increase in idle gold circulation. The state-run Xinhua News Agency framed the story from a Chinese consumer perspective, noting that even luxury watches are increasingly viewed through the lens of commodity value.

Retired New York engineer Mitchell Talisman exemplified this shift in behavior. Motivated by high gold prices, he sold two gold watches and a chain containing 35 grams of 58% purity gold for $2,660 in December 2025. “I’d had a bunch of stuff sitting in a safety deposit box for over 10 years,” he told Reuters.

A Clash of Values

The trend has created a sharp divide between those who see economic opportunity and those who mourn the loss of horological heritage.

Freddy Keshmiri, a vintage watch dealer in Beverly Hills, told Robb Report: “A lot of my colleagues are melting all these types of watches. I wouldn’t do it. It feels like I’d be killing someone. But it’s been going on for the past two to three months.”

Adrian Hailwood, a specialist in horological history, expressed similar sentiments: “I find it very sad, because obviously once something has been melted, it’s gone forever.”

Eugene Tutunikov, CEO of SwissWatchExpo, offered a more measured perspective: “We’re seeing more people liquidate gold watches purely for their metal value, particularly with certain brands and older pieces. In some cases, watches are being treated like scrap gold rather than collectible timepieces, which is unfortunate — but it’s also quietly reducing the supply of vintage gold watches that survive in good condition.”

What Comes Next

With analysts projecting gold could reach between $5,400 and $6,300 per ounce this year, the pressure to dismantle watches for their metal content is likely to continue. The trend raises fundamental questions about the long-term value of luxury goods in an era of commodity price volatility. As vintage gold watches are melted, the surviving supply becomes scarcer, potentially driving up prices for remaining pieces over time.

For now, the message is clear: when a watch is worth more as a pile of melted metal than as a precision timepiece, economics tends to win over sentiment. Whether this represents a rational market correction or a short-sighted cultural loss depends entirely on which side of the melting furnace you stand.