Rising Gold Prices Are Even Driving Up the Cost Of Used Rolex Watches

[colemanitis]

http://www.prweb.com/releases/2006/7/prweb406439.htm

[JJ Irani]

Good post, Jeff. Only the other day I was discussing the same issue with my AD. He told me that the prices of all YG and TT prices would be going UP!!

BTW, did you guys know that Rolex actually has their own foundry? Not sure about the exact working of a foundry, but I've been informed that Rolex do have an adequate supply of gold.

JJ

[s7horton]

Originally Posted by JJ Irani

BTW, did you guys know that Rolex actually has their own foundry and don't have to depend on any external source for their supply of precious metals?

JJ

That's good to hear. Where did you come up with that? You are a wealth of knowledge indeed!

I don't see how the price of gold can influence the price of a gold or TT Rolex because it's not like you're paying for the precise amount of gold in said watch. If that was the case, the price of gold and TT watches would fluctuate with the daily gold market.

Since we all know that doesn't happen, the fact that Rolex will use this increase in gold as a rationale to increase the price of their gold watches is less than an honest rationale, IMHO.

The price diff in Canada between a SS Sub and a TT Sub is about $3000. There's no way there's $3000 worth of gold in a TT Sub, even when you factor in machining and foundering (is that a word?, I mean outside of shipping).

Just another side of the coin for discussion.

Originally Posted by JJ Irani

Good post, Jeff. Only the other day I was discussing the same issue with my AD. He told me that the prices of all YG and TT prices would be going UP!!

BTW, did you guys know that Rolex actually has their own foundry and don't have to depend on any external source for their supply of precious metals?

JJ

Hang on there JJ!

When you say they have their own foundry, that may be the case (I'd like to know your reference for that information) but that hardly means they don't have to rely on anyone else for their supply of precious metals. The foundry is only one small part of gold processing. The foundry is simply where the casting of the gold into pre-process shapes would occur (bar, plate, etc.).

Are you saying they have their own mines and smelting facilities as well, or do the Rolex fairies simply make the gold appear out of thin air at their foundry?

Not trying to be difficult, but it bothers me when statements are made that others take as fact when at the very least there are some further questions to be asked before I would consider them accurate. I would be very surprised (but willing to stand corrected if evidence is presented) if Rolex really did bring the gold from the ore stage right from the ground to the finished case stage. For the very small amount they would use it would not make any economic sense to be a mining/refining company on top of being a watch company.

[s7horton]

Originally Posted by Atomic

The price diff in Canada between a SS Sub and a TT Sub is about $3000. There's no way there's $3000 worth of gold in a TT Sub, even when you factor in machining and foundering (is that a word?, I mean outside of shipping).

Just another side of the coin for discussion.

Just for discussion sake.... I'll bet if you melt down all the gold in a TT sub (bracelet, clasp, dail, bezel & insert, and crown) you would come up with a retail cost of 3000 dollars plus or minus. Keep in mind that retail for jewelers is not what they sell it for.

Also, I would think that Rolex sees more value in the 16613 over the 16610 than just in the gold. They have a product they can market and feel that is worth more than just the material cost.

[mike]

Originally Posted by JJ Irani

Good post, Jeff. Only the other day I was discussing the same issue with my AD. He told me that the prices of all YG and TT prices would be going UP!!

BTW, did you guys know that Rolex actually has their own foundry and don't have to depend on any external source for their supply of precious metals?

JJ

I was aware that Rolex did have their oun foundry, but I thought the supply of precious metals was out sourced. Could be wrong though.

[JJ Irani]

Originally Posted by Avalon

Hang on there JJ!

When you say they have their own foundry, that may be the case (I'd like to know your reference for that information) but that hardly means they don't have to rely on anyone else for their supply of precious metals. The foundry is only one small part of gold processing. The foundry is simply where the casting of the gold into pre-process shapes would occur (bar, plate, etc.).

Are you saying they have their own mines and smelting facilities as well, or do the Rolex fairies simply make the gold appear out of thin air at their foundry?

Not trying to be difficult, but it bothers me when statements are made that others take as fact when at the very least there are some further questions to be asked before I would consider them accurate. I would be very surprised (but willing to stand corrected if evidence is presented) if Rolex really did bring the gold from the ore stage right from the ground to the finished case stage. For the very small amount they would use it would not make any economic sense to be a mining/refining company on top of being a watch company.

Look Al...I don't have the full details nor do I know how the actual process of smelting gold works.

I got the info from a very reliable source; but no details were given. Maybe what you say is partially correct, but I really cannot add any more to what I know.

Cheers - JJ

[padi56]

Well in reality all gold watches show poor value for money. Talking actual gold value,the amount of gold in say the Rolex President can be determined as follows.

Case weights 18.5 grams. Contains 13.875 grams of pure gold. It has a value of approx $178.43.

Case back weighs 7.21 grams. Contains 5.41 grams of pure gold. It has a value of approx $69.57.

Bezel weighs 5.30 grams. Contains 3.98 grams of pure gold. It has a value of approx $51.18.

The bracelet weighs 68.85 grams. Contains 51.64 grams of gold. It has the most value at approx $664.09.

The total value of the pure gold in the Rolex President is approx $963.27.trade prices,this is based on 18kt models 14kt would be quite a bit less.and even by today gold price increase.You would still be lucky to see much more than a true value of just over $1000 of pure gold.At one time most of the gold watch cases were made by Dennison

[s7horton]

Originally Posted by padi56

Well in reality all gold watches show poor value for money. Talking actual gold value,the amount of gold in say the Rolex President can be determined as follows.

Case weights 18.5 grams. Contains 13.875 grams of pure gold. It has a value of approx $178.43.

Case back weighs 7.21 grams. Contains 5.41 grams of pure gold. It has a value of approx $69.57.

Bezel weighs 5.30 grams. Contains 3.98 grams of pure gold. It has a value of approx $51.18.

The bracelet weighs 68.85 grams. Contains 51.64 grams of gold. It has the most value at approx $664.09.

The total value of the pure gold in the Rolex President is approx $963.27.trade prices,this is based on 18kt models 14kt would be quite a bit less.and even by today gold price increase.You would still be lucky to see much more than a true value of just over $1000 of pure gold.At one time most of the gold watch cases were made by Dennison

Padi, not arguing with you, just curious where you got the info. If I'm not mistaken, gold is currently at 700 dollars an ounce. If all of your numbers above are correct, the case should be worth $346.88 USD, and the bracelet should have a value of $1,291.00. Don't get me wrong, this isn't to say that the gold is as valuable as the price of the watch.

But then again, there isn't much in this world where you can buy for retail, melt it down, sell it for scrap and not lose money. Unless of course, you are in the copper market...

[padi56]

Originally Posted by s7horton

Padi, not arguing with you, just curious where you got the info. If I'm not mistaken, gold is currently at 700 dollars an ounce. If all of your numbers above are correct, the case should be worth $346.88 USD, and the bracelet should have a value of $1,291.00. Don't get me wrong, this isn't to say that the gold is as valuable as the price of the watch.

But then again, there isn't much in this world where you can buy for retail, melt it down, sell it for scrap and not lose money. Unless of course, you are in the copper market...

Current Gold Bullion is roughly $630 ounce dont forget thats pure 24kt gold Current scrap 18kt gold is around $13.50- $13.70 gram

Originally Posted by padi56

Current Gold Bullion is roughly $630 ounce dont forget thats pure 24kt gold Current scrap 18kt gold is around $13.50- $13.70 gram

Good call and thanks for the info Peter. It illustrates my point to perfection. My guesstimate is that a SS Rolex likely costs Rolex about US$200 per copy, including R & D, overhead, etc. I'd bet a 3135 movement doesn't cost them much more than about $50 to produce. So even if you factor in the retail cost of gold, a President shouldn't cost more than say US$1500 to make, and yet they sell for what, US$20,000? That's a helluva markup.

I mean, on the crazy TV shopping channel I've seen 18kt gold watches with robust ETA movements in them being sold for under US$1500. They're obviously making a profit on those and I can't see the production costs of those 'cheap' watches differing much from Rolex's cost.

I know from my bicycle racing, that a component gruppo from Campagnolo retails for about CDN$3000, of which the retailer makes a profit, the distributor makes a profit, the importer makes a profit and Campagnolo makes a profit. Having talked to my importer, he said the actual cost per gruppo for Campagnolo is about $250. That's one helluva markup when it gets to the customer. I can't see the jewellry business being much different.

[padi56]

Originally Posted by Atomic

Good call and thanks for the info Peter. It illustrates my point to perfection. My guesstimate is that a SS Rolex likely costs Rolex about US$200 per copy, including R & D, overhead, etc. I'd bet a 3135 movement doesn't cost them much more than about $50 to produce. So even if you factor in the retail cost of gold, a President shouldn't cost more than say US$1500 to make, and yet they sell for what, US$20,000? That's a helluva markup.

Well John several factors first in the equation, first this is why many manufactures don't make there own movements.The design cost and the tooling to make a single movement from scratch would cost several millions.But once you have this design, tooling etc,costs then per Rolex unit against say the top grade ETA unit, IMO would cost out not a great difference.Most watch production lines now are robotised,and the days of the fully hand assembled movements are long gone.

[dman]

Not paying for the gold in the watch, you are paying for the name on the dial.

[padi56]

Originally Posted by dman

Not paying for the gold in the watch, you are paying for the name on the dial.

Most certainly correct Daren but this applies to most high end brands.And so called designer brands like for instance Jacobs.And for people that have more money than sense.Victoria Beckham's Louis Vuitton handbag, that costs as much as a small family car FFS.At least with a high end watch you should have something that could last a lifetime and more.But to pay almost £6000 for a bleeding handbag,to strut around,like a stick insect sure beats me.

[JJ Irani]

Originally Posted by dman

Not paying for the gold in the watch, you are paying for the name on the dial.

Not just the name, Daren....we are talking top class quality here. When you buy a Merc or a BMW, you're not just paying for the 3-pointed star or the BMW badge....it's all about superior quality, research, finish, QC, rigorous testing and an end product that reeks simply CLASS!!

And that's what a Rolex is about - CLASS!! You wear it and you feel the class on your wrist...others instantaneously recognise that class. A Rolex can be passed on from one generation to the next generation....and it never dies.

And the same can be said about any other high-end CLASSY Swiss watch.

JJ