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Old 24 February 2020, 04:21 AM   #1
Mbalce
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Why are Platinum watches more expensive than Gold ones?

Its been a few years now in the precious metal market since platinum was worth more than gold. The spread seems to be getting wider and wider with Gold moving over $1600 vs Platinum which has been stuck under $1k/oz for quite some time now.

Why are Platinum watches still priced above both WG and YG? And does anyone see this changing over time?
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Old 24 February 2020, 04:25 AM   #2
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There is more platinum in a platinum watch than there is gold in a gold watch (95% vs 75% by mass, or something).

Though the actual answer is simply that platinum is considered to be more exclusive than gold.
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Old 24 February 2020, 04:26 AM   #3
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Platinum is also much heavier (remember, PM prices are based on weight, not size) and more difficult to work with. Whether or not that makes up the difference in prices, I don't know.
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Old 24 February 2020, 04:31 AM   #4
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Quote:
Originally Posted by Zakalwe View Post
There is more platinum in a platinum watch than there is gold in a gold watch (95% vs 75% by mass, or something).

Though the actual answer is simply that platinum is considered to be more exclusive than gold.
I have watched precious metal prices for most of my 59 years on this rock. In all but the last couple of those years, Platinum has consistently been more expensive than gold.

I understand that historically, Platinum has been more exclusive, driven mostly by being more expensive.

I was more being speculative on the long term. Will Platinum start to lose some of that luster in general if the price continues to be a fraction of the gold market and people start to accept that as the new normal.

As far as difficulty to work with - I cannot imagine it is any more difficult than stainless steel and certainly easier than titanium.

Last edited by Mbalce; 24 February 2020 at 04:36 AM.. Reason: grammar (again)
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Old 24 February 2020, 04:37 AM   #5
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What a luxury good is made of has very little affect on it's market price.

Trying to equate the spot price of different metals to a product is a fruitless exercise.

People want platinum, there are very few made, they demand higher prices - end of story.
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Old 24 February 2020, 05:06 AM   #6
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The watch isn't a commodity. Pt and Au are. If you want to have a commodity buy them in raw form.
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Old 24 February 2020, 05:28 AM   #7
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The price of platinum has little to do with the price of a Platinum Daytona or Day Date. What does have to do with it is the amount of said PM and the workability and the overall feel. I might suggest you try a steel then gold then platinum version of the same watch on in succession so you can feel the difference. The other party trick of a platinum watch is it flies under the radar to 99% of the people out there unless you happen to be a WIS...
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Old 24 February 2020, 05:35 AM   #8
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Platinum or Gold you are paying for the the R not the material. Platinum is more exclusive. Will this change. Maybe but unlikely. By the way, in the R world some sports SS have a higher market value than their SS/Gold brothers and sisters. Crazy.
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Old 24 February 2020, 07:12 AM   #9
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The watch isn't a commodity. Pt and Au are. If you want to have a commodity buy them in raw form.
I respectfully disagree. High end watches are IMHO indeed a commodity. Most Rolexes you can track and estimate the price/value using only a combination of Ref number and an accurate description condition, without even seeing the actual watch.

Many people buy, sell and trade for profit.

At this point - they are a commodity.
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Old 24 February 2020, 08:19 AM   #10
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Quote:
Originally Posted by HogwldFLTR View Post
The watch isn't a commodity. Pt and Au are. If you want to have a commodity buy them in raw form.
Rolexes not a commodity? Geneva, their AD's and their tame greys, might disagree.
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Old 24 February 2020, 08:32 AM   #11
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EXACTLY. I'm surprised at how frequently this subject comes up. I guess the search function is disabled.

Quote:
Originally Posted by Tools View Post
What a luxury good is made of has very little affect on it's market price.

Trying to equate the spot price of different metals to a product is a fruitless exercise.

People want platinum, there are very few made, they demand higher prices - end of story.
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Old 24 February 2020, 08:36 AM   #12
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Common thread, search for it. Higher purity at 95% and Platinum is harder to work with than gold and steel. One example is why there is no fluted dial on the day date.
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Old 24 February 2020, 08:38 AM   #13
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The same reason Stainless Steel watches sell for what they do ... marketing and perceived exclusivity.
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Old 24 February 2020, 08:47 AM   #14
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Why is a steel Rolex worth $10,000?
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Old 24 February 2020, 09:22 AM   #15
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Why are Platinum watches more expensive than Gold ones?

Quote:
Originally Posted by Mbalce View Post



Why are Platinum watches still priced above both WG and YG? And does anyone see this changing over time?


I think the answer is because Rolex, Patek and others choose to price them that way.

No change in sight.

Why is spot Gold higher than Pt.?
Try explaining that... platinum is only slightly more abundant in the earth's crust than gold but its extraction is more difficult and more expensive to produce than gold.


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Old 24 February 2020, 09:45 AM   #16
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1) There's more platinum than gold in a watch, both by weight and by purity.
2) Platinum is harder to work and finish, requiring its own tooling and equipment.
3) Platinum watches are made in smaller numbers, for worse economies of scale.
4) Platinum has historically been priced higher than gold, and market momentum maintains that difference.
5) Materials cost isn't the most important factor in the final retail price of a luxury product. $20,000 handbags aren't made with leather that costs 100 times regular leather.

If you wonder why platinum costs so much more than gold, but don't wonder why gold costs so much more than steel, then you're missing most of what's happening.
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Old 24 February 2020, 09:51 AM   #17
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Quote:
Originally Posted by 77T View Post
I think the answer is because Rolex, Patek and others choose to price them that way.

No change in sight.

Why is spot Gold higher than Pt.?
Try explaining that... platinum is only slightly more abundant in the earth's crust than gold but its extraction is more difficult and more expensive to produce than gold.


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Palladium is closing in on 3x the price of platinum. Blue palladium submariner 2020!
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Old 24 February 2020, 09:58 AM   #18
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Now that you mention that, palladium is in the WG alloy that Rolex produces...


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Old 24 February 2020, 10:18 AM   #19
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The answer is that people are willing to pay more.

Cost often does not correlate with price.
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Old 24 February 2020, 10:20 AM   #20
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Why is a steel Rolex worth $10,000?
Haha, this is like, why aquanaut with plastic strap is more expensive than with steel bracelet
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Old 24 February 2020, 10:36 AM   #21
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19 posts since 2011? Wow, I am impressed
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Old 24 February 2020, 11:26 AM   #22
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19 posts since 2011? Wow, I am impressed
I read more than I write...
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Old 24 February 2020, 11:31 AM   #23
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Sorry if this has been discussed before. I do invest in precious metals and have for over 25 years. For 23 and 1/2 of those years, Platinum has traded higher than gold and platinum jewelry has always commanded a premium.

Within the past week is the first time I have ever seen Gold nearing the 2x mark compared to Platinum. There is no indication that the ratio will do anything other than get larger in the near term.

I have only very recently came to the personal belief that Platinum may never out perform gold in my lifetime.

The world is changing. Maybe there are times to open old discussions.
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Old 24 February 2020, 02:45 PM   #24
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Platinum has traded below spot gold before, and more than once, as recently as 2015. Before that, in 2011, another P2G ratio < 1 period presaged an equities downturn after S&P downgraded US debt.

It is a signal for sure, but not of a reduction of the Rolex P2G price ratio.


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Old 24 February 2020, 03:20 PM   #25
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Platinum has traded below spot gold before, and more than once, as recently as 2015. Before that, in 2011, another P2G ratio < 1 period presaged an equities downturn after S&P downgraded US debt.

It is a signal for sure, but not of a reduction of the Rolex P2G price ratio.


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I am aware of both those events. They were both good plat buying opportunities as they were relatively short lived and there was a better run up to be has after. You should agree there is a huge difference in < 1 and 2:1

It was more a mental exercise than any real speculation that Rolex should or would start charging more for Gold than Platinum. However, once and if the pubic gets used to the idea that Platinum is HALF the price of gold - markets may eventually change.

Though if gold continues its current run (and given several major global factors currently playing out I see no reason it won’t) at some point Rolex my start raising prices on Gold versions because obviously they can’t absorb that cost increase
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Old 24 February 2020, 03:21 PM   #26
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Fewer made in platinum. Check preowned pages WG vs YG vs platinum
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Old 24 February 2020, 03:48 PM   #27
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If we can forget about the price difference for a minute can someone please tell me what the durability and strength of platinum is compared to stainless steel ?
I own a couple of gold Rolex and while in my opinion they look better than steel they seem a lot softer material
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Old 24 February 2020, 04:21 PM   #28
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Metals are traded by weight and not by volume.

The same object in Platinum weights almost double than in a 750/Gold alloy, Pt is sold in 950/- alloys and Raw PT is denser (more heavy) than raw Gold.
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Old 24 February 2020, 07:33 PM   #29
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Quote:
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If we can forget about the price difference for a minute can someone please tell me what the durability and strength of platinum is compared to stainless steel ?
I own a couple of gold Rolex and while in my opinion they look better than steel they seem a lot softer material
From a hardness POV they're about the same.

The Mohs Scale of Hardness for Metals
Here is a list of the hardness grades for some of the metals that you are most likely to come across in your everyday life, especially when dealing with jewelry:
Lead: 1.5
Tin: 1.5
Zinc: 2.5
Gold: 2.5-3
Silver: 2.5-3
Aluminum: 2.5-3
Copper: 3
Brass: 3
Bronze: 3
Nickel: 4
Platinum: 4-4.5
Steel: 4-4.5
Iron: 4.5
Palladium: 4.75
Rhodium: 6
Titanium: 6
Hardened steel: 7-8
Tungsten: 7.5
Tungsten carbide: 8.5-9

https://www.jewelrynotes.com/the-moh...-is-important/
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Old 24 February 2020, 07:40 PM   #30
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Quote:
Originally Posted by Mbalce View Post
I respectfully disagree. High end watches are IMHO indeed a commodity. Most Rolexes you can track and estimate the price/value using only a combination of Ref number and an accurate description condition, without even seeing the actual watch.

Many people buy, sell and trade for profit.

At this point - they are a commodity.
Quote:
Originally Posted by Lt Virgil Hilts View Post
Rolexes not a commodity? Geneva, their AD's and their tame greys, might disagree.
Sorry, they're luxury goods, guys.

commodity
[kəˈmädədē]

NOUN
a raw material or primary agricultural product that can be bought and sold, such as copper or coffee.

Just because someone chooses to change the meaning of a word doesn't mean they're using it correctly. Words have meaning; use them correctly.

Also regarding the original question don't forget that Au is 18KT which is only 75% gold and the remainder alloy materials. Pt is about 98% iirc.
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