Why are platinum Rolex watches more expensive than gold ones when platinum is cheaper

[mangoseed]

As of October 23 2017, gold is $1,282 an ounce while platinum is only $927.

Yet platinum Daydate 40's seem to be about $10,000 more expensive than the gold models.

[RoyalOac]

I believe the amount of platinum in the world is a mere fraction of the amount of gold available in the world.

[MaverickMP]

Originally Posted by mangoseed

As of October 23 2017, gold is $1,282 an ounce while platinum is only $927.



Yet platinum Daydate 40's seem to be about $10,000 more expensive than the gold models.

Because it’s not pure gold. Gold is mixed with other metals so there’s actually less gold in a gold watch than platinum in a platinum watch.


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[tyler1980]

its not just about metal values.... but even if it was, a Pt watch is 950 which is 95% platinum and a gold watch is 750 which is 75% gold. There is more Pt in a Pt watch than gold in a gold watch.

And of course my favorite all time answer is there isn't 8K of steel in a steel watch so why does that cost so much?

Platinum is more exclusive, its both more rare in the earth as well as for a material in watches vs gold, it's harder to work with, and feels more substantial. All of which contribute to the extra bit of exclusivity of a platinum watch and influences the price.

[mangoseed]

Originally Posted by RoyalOac

I believe the amount of platinum in the world is a mere fraction of the amount of gold available in the world.

Not relative to the demand, otherwise it would be more expensive.

[GolfPunk]

Platinum also weighs more so pound for pound there is more actual metal (grams) in a platinum watch than a gold watch, then there’s 95% platinum and 75% gold, then there’s the old addage that Platinum ‘is the most noble metal’.

[Bigblu10]

Platinum is less common and more rare. Exclusivity factor.
Has nothing to do with the value per ounce.
There are many threads on this topic.

[HL65]

Originally Posted by tyler1980

its not just about metal values.... but even if it was, a Pt watch is 950 which is 95% platinum and a gold watch is 750 which is 75% gold. There is more Pt in a Pt watch than gold in a gold watch.

And of course my favorite all time answer is there isn't 8K of steel in a steel watch so why does that cost so much?

Platinum is more exclusive, its both more rare in the earth as well as for a material in watches vs gold, it's harder to work with, and feels more substantial. All of which contribute to the extra bit of exclusivity of a platinum watch and influences the price.

Exactly

[Tools]

Prices of goods are based on what the market will allow and seldom reflect the actual hard-value of materials.

Plenty of folks pay over a hundred bucks for torn Levi's when you can get the untorn version for 20.

[HogwldFLTR]

Originally Posted by tyler1980

its not just about metal values.... but even if it was, a Pt watch is 950 which is 95% platinum and a gold watch is 750 which is 75% gold. There is more Pt in a Pt watch than gold in a gold watch.

And of course my favorite all time answer is there isn't 8K of steel in a steel watch so why does that cost so much?

Platinum is more exclusive, its both more rare in the earth as well as for a material in watches vs gold, it's harder to work with, and feels more substantial. All of which contribute to the extra bit of exclusivity of a platinum watch and influences the price.

A density comparison of Pt to 18K Au indicates the Pt weighs about 30% more than the Au. Therefore for the same volume 30% more Pt by weight is needed. That only brings the per volume price of the Pt up to $1200 to fill the volume of an ounce of Au. I'm certain that the pricing isn't permanent either. The above makes a lot of sense.

[THC]

From a mfg standpoint, Platinum is a much more difficult metal to work with, in creating a watch

[AK797]

People perceive platinum as the superior metal, and when that changes so will prices, all the other maths is largely insignificant in what the market will bear.

[Bryant Park]

There is an old expression regarding why a dog licks himself....

In this case it's not that they can, it's because people will pay for it. Fair question and I think it is because consumers prefer the subtlety of white medals but want the weight and prestige of platinum. It creates a relatively small, but well funded group of consumers who are more than willing to pay up.

[Pmt2]

Platinum is very difficult to work with.

[derekstlmo]

It’s harder to machine

[tng11]

Originally Posted by tyler1980

its not just about metal values.... but even if it was, a Pt watch is 950 which is 95% platinum and a gold watch is 750 which is 75% gold. There is more Pt in a Pt watch than gold in a gold watch.

And of course my favorite all time answer is there isn't 8K of steel in a steel watch so why does that cost so much?

Platinum is more exclusive, its both more rare in the earth as well as for a material in watches vs gold, it's harder to work with, and feels more substantial. All of which contribute to the extra bit of exclusivity of a platinum watch and influences the price.

Ding ding ding.

Plus, I would say it's also influenced by the fact Platinum has historically always been more expensive than gold. Could you imagine the revolt from Platinum owners if brands just dropped prices to account for PM prices? Watch prices are far removed from actual PM prices - it may be used as an excuse to raise prices, but the amount of actual metal in them is so low relative to the price of the watch that there is almost zero correlation between PM prices and watch MSRPs.

[Rock]

Originally Posted by Tools

Plenty of folks pay over a hundred bucks for torn Levi's when you can get the untorn version for 20.

Untorn Levis are A$100. here, never mind torn ones.

[77T]

I think the primary reason Rolex does this is to drive such discussions into the ground...
Maybe ask why Rolex doesn’t make a Sterling Silver-based watch? It’d be easier than Pt and look the same.


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[jrs146]

Originally Posted by tyler1980

And of course my favorite all time answer is there isn't 8K of steel in a steel watch so why does that cost so much?

About all you need to answer this question.


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[Juantxo]

Originally Posted by THC

From a mfg standpoint, Platinum is a much more difficult metal to work with, in creating a watch

Correct. Moreover, there is the marketing factor as historically platinum has been the more expensive metal.

[Kevin O'Brien]

As someone who trades gold, silver, and platinum bullion on a daily basis I find this an interesting topic.

The actual gold value in watches is quite minimal (usually 20% or less) however there is a significant premium for gold and platinum watches because it is a gold or platinum watch. It is the status, the heft, and everything else associated with owning precious metal watches. There is very little reason why platinum presidential costs almost $25,000 more than the gold counterpart.

About platinum: it is harder to use and make watches out of but it does cost less than gold. Yes, it is true that it is rarer but there is significantly less demand for it. For a while, the price was artificially pumped up to around $2,000 an oz. During this period platinum gained status over gold because costed significantly more.

The math:

Vale of a 18k gold presidential - $5,646.23 basis $1282 gold melt oz
Weight 235 grams

Value of a 95% platinum presidential - $7,777.83 basis $923 plat melt oz
Weight 275 grams

Difference in metal value $2,131.60
Difference in retail price $24,950

So does it cost $22,819 more to make a Rolex presidential out of platinum? I would highly doubt it! But hey you are getting platinum and an amazing dial color.

[Kevin O'Brien]

Originally Posted by 77T

I think the primary reason Rolex does this is to drive such discussions into the ground...
Maybe ask why Rolex doesn’t make a Sterling Silver-based watch? It’d be easier than Pt and look the same.


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Sterling silver watches have never taken off widely because they tarnish and the metal generally looks terrible after worn. Sterling silver also is highly malleable meaning it dents and scratches extremely easily.

I would want a watch made out of just about anything other than silver.

[Bryant Park]

Originally Posted by Kevin O'Brien

As someone who trades gold, silver, and platinum bullion on a daily basis I find this an interesting topic.

The actual gold value in watches is quite minimal (usually 20% or less) however there is a significant premium for gold and platinum watches because it is a gold or platinum watch. It is the status, the heft, and everything else associated with owning precious metal watches. There is very little reason why platinum presidential costs almost $25,000 more than the gold counterpart.

About platinum: it is harder to use and make watches out of but it does cost less than gold. Yes, it is true that it is rarer but there is significantly less demand for it. For a while, the price was artificially pumped up to around $2,000 an oz. During this period platinum gained status over gold because costed significantly more.

The math:

Vale of a 18k gold presidential - $5,646.23 basis $1282 gold melt oz
Weight 235 grams

Value of a 95% platinum presidential - $7,777.83 basis $923 plat melt oz
Weight 275 grams

Difference in metal value $2,131.60
Difference in retail price $24,950

So does it cost $22,819 more to make a Rolex presidential out of platinum? I would highly doubt it! But hey you are getting platinum and an amazing dial color.

Amazing response thank you!

[Kevin O'Brien]

Also—

Forgot to add. The movement accounts for about 10 to 15% of the weight of the watch so in order to find out the exact metal content you would have to find the weight of a presidential movement and subtract it from the gold and platinum melt value.

[No SUBctitute]

Originally Posted by Kevin O'Brien

As someone who trades gold, silver, and platinum bullion on a daily basis I find this an interesting topic.

The actual gold value in watches is quite minimal (usually 20% or less) however there is a significant premium for gold and platinum watches because it is a gold or platinum watch. It is the status, the heft, and everything else associated with owning precious metal watches. There is very little reason why platinum presidential costs almost $25,000 more than the gold counterpart.

About platinum: it is harder to use and make watches out of but it does cost less than gold. Yes, it is true that it is rarer but there is significantly less demand for it. For a while, the price was artificially pumped up to around $2,000 an oz. During this period platinum gained status over gold because costed significantly more.

The math:

Vale of a 18k gold presidential - $5,646.23 basis $1282 gold melt oz
Weight 235 grams

Value of a 95% platinum presidential - $7,777.83 basis $923 plat melt oz
Weight 275 grams

Difference in metal value $2,131.60
Difference in retail price $24,950

So does it cost $22,819 more to make a Rolex presidential out of platinum? I would highly doubt it! But hey you are getting platinum and an amazing dial color.

Kevin O'Brien wins the award for best answer (actually, 2) of the night. Thanks for adding knowledge to the board!

[Kevin O'Brien]

Originally Posted by No SUBctitute

Kevin O'Brien wins the award for best answer (actually, 2) of the night. Thanks for adding knowledge to the board!

Happy to be of assistance!

[GB-man]

Aliens want our platinum. When they come, and they will, all those wearing platinum Rolex will be spared. Fact.

[texasmade]

Originally Posted by GB-man

Aliens want our platinum. When they come, and they will, all those wearing platinum Rolex will be spared. Fact.

If they're Ferengi, they're going to want our gold pressed latinum.

[Star Ferry]

Because it's the best metal for silencing haters

[Seanken]

Originally Posted by Tools

Prices of goods are based on what the market will allow and seldom reflect the actual hard-value of materials.

Plenty of folks pay over a hundred bucks for torn Levi's when you can get the untorn version for 20.

^this

While it's definitely not an apples to apples comparison, the pet rock nonsense from the '70's shows that when the marketing and public desire coincide you can sell dirt to farmers at a premium.