Story Highlight
– High gold prices make watchmaking unviable this year.
– Rolex Daytona gold content costs over $26,000 now.
– Luxury brands face profit losses without price increases.
– Vacheron Constantin launches titanium instead of gold watches.
– Overseas Tourbillon priced at £139,900, rose gold £169,900.
Full Story
This year, the luxury watch industry is unlikely to see many gold timepieces introduced, primarily due to the soaring cost of gold, which stands at around $5,000 per ounce. This steep price tag presents a challenge for watchmakers, as they would need to significantly elevate their prices to maintain profitability on gold pieces, likely deterring potential buyers or severely impacting profit margins.
For instance, consider the Rolex Daytona model, particularly the reference 116508. Through some AI-aided analysis, it appears that this specific Daytona, weighing 218 grams (7.7 ounces), contains approximately 198 grams (7 ounces) of gold in its case and bracelet when accounting for the weight of the movement but factoring in the weight of its gold rotor. Rolex constructs its timepieces using 18-carat gold, which consists of 75% pure gold, translating to about 5.25 ounces of 24-carat gold.
Back in late 2024, the cost of this quantity of gold would have amounted to $14,175. However, with the current gold price reaching $5,000 per ounce, the raw material costs have surged to $26,250—doubling the expenses associated with producing the watch. This represents nearly half of the American retail price of $52,600, which has increased significantly compared to earlier this year.
From this retail amount, Rolex must also cover the margins for retailers, as well as operational costs for its local offices and its headquarters. Unless the brand resorts to innovative accounting practices, it would face losses with each gold watch sold unless prices increase by an estimated 25%. Such a hike would undoubtedly be an unwelcome surprise for customers who have been on waiting lists, some of whom signed up while the watches were priced closer to $40,000 in 2024.
This universal challenge facing luxury watch manufacturers may shed light on Vacheron Constantin’s decision to launch its key model for 2026 in titanium—an uncommon choice for the brand. The new Overseas Tourbillon, crafted from grade 5 titanium, is priced significantly lower than its gold counterparts, given the current market value of titanium is between $0.60 and $1.00 per ounce.
The Overseas Tourbillon features a striking deep red dial and offers buyers a choice of titanium bracelets or rubber straps in either white or red. Available for purchase at a retail price of £139,900, the same model in rose gold is priced at £169,900, suggesting that Vacheron Constantin has strategically built in some extra margin. Additionally, the watch is available in a stainless-steel model, maintaining the same dimensions of 42.5mm x 10.4mm and powered by the brand’s own calibre 2160, a 2.5Hz automatic movement boasting an 80-hour power reserve.
