Rising Gold Prices Drive Owners to Melt Luxury Watches for Profit

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Rising gold prices have prompted luxury watch owners in the Middle East to melt down their timepieces for higher profits, according to multiple reports. Industry sources indicate that the practice, driven by surging gold values, has become increasingly common among collectors and investors seeking to capitalize on the metal’s market performance.

According to Al-Arabiya TV, the trend reflects a shift in consumer behavior as gold prices hit record highs in 2026. “Many owners are opting to melt their watches rather than sell them, as the scrap value of the gold content often exceeds the retail price of the timepiece,” a source familiar with the market told the outlet. This strategy allows individuals to convert collectibles into liquid assets, leveraging the volatility of precious metals.

The phenomenon is not isolated to a single region. Reports from Sabaq Al-Electronica and Al-Sharq Al-Awsat highlight similar patterns in Saudi Arabia and the UAE, where gold prices have risen by over 20% year-to-date. The decision to melt watches is particularly appealing for high-end brands like Rolex, which have seen their gold models appreciate in value. However, experts note that the practice is more prevalent among second-hand or vintage timepieces, where the gold content outweighs the brand’s resale appeal.

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What Drives the Trend of Melting Luxury Watches?
The primary factor behind the trend is the sharp increase in gold prices, which have been influenced by global economic uncertainty and inflationary pressures. According to the World Gold Council, gold prices reached $2,400 per ounce in June 2026, the highest level since 2020. This surge has made gold-containing items, including luxury watches, more valuable as raw materials.

For example, a Rolex Datejust 41 in 18-karat gold, which might retail for $15,000, could yield over $18,000 in scrap value if melted down, depending on the current gold rate. “The margin is significant,” said a metals trader in Dubai, who spoke on condition of anonymity. “Investors are prioritizing immediate returns over long-term appreciation.”

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How Does This Affect the Watch Market?
The shift has raised concerns among watch dealers and collectors. Ahmed Al-Maktoum, a Dubai-based watch dealer, noted that the practice is “eroding the secondary market for luxury timepieces.” He explained that buyers are now hesitant to purchase pre-owned watches, fearing they may be melted down rather than preserved.

This dynamic has also impacted the pricing of gold watches. According to Tawasol News Network, Rolex recently increased the global price of its gold models by 5% in response to the heightened demand for scrap gold. The move underscores the interconnectedness of the luxury goods and precious metals markets.

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What Are the Broader Economic Implications?
The trend highlights the growing influence of commodity markets on traditional luxury sectors. As gold prices remain volatile, investors are increasingly viewing luxury items as financial assets rather than status symbols. This reclassification has sparked debates about the future of the watch industry.

“Luxury brands may need to adapt by emphasizing non-gold materials or offering buyback programs to retain value,” said a financial analyst at Saudi Capital Securities. However, such measures are still in the early stages of discussion.

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Why Is This Trend Significant for Consumers?
For average consumers, the practice raises questions about the long-term value of luxury goods. While some view melting watches as a pragmatic financial decision, others argue it undermines the cultural and historical significance of collectible timepieces.

“The emotional value of a watch is lost when it’s reduced to scrap,” said a vintage watch collector in Riyadh. “But for many, the financial incentive is hard to ignore.”

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What Comes Next for the Market?
Industry observers predict the trend will persist as long as gold prices remain elevated. However, potential regulatory actions could alter the landscape. For instance, some governments are considering restrictions on the melting of precious metals to stabilize markets.

In the absence of such measures, the practice is likely to continue, reshaping how luxury goods are perceived and valued. As one analyst put it, “The line between art and asset is blurring, and the watch industry is at the center of this transformation.”