As the price of gold continues its upward trend, we're seeing a compelling and largely overlooked opportunity in the luxury watch market. 

Some full-gold watches are trading below their melt value.

Pricing inefficiencies exist in the market today, specifically, watches whose intrinsic gold content exceeds their secondary market value. 

For example, Hublot Big Bang models in solid rose or yellow gold are now trading at steep discounts below MSRP, and in some cases, even below their melt value.

The Ulysse Nardin Maxi Marine in full gold has a similar disconnect. Low collector demand and poor resale momentum make these models undervalued but the gold content tells a different story.

So what’s driving this arbitrage? 

• A rising spot price for gold throughout the year

• Depressed secondary market pricing for certain brands and models

• Low liquidity and limited collector interest in some luxury watch models

The same can’t be said about the flagship models from Rolex, Patek Philippe, and Audemars Piguet. They’re benefiting from both collector demand and the tailwind of increasing gold prices, which makes them longer-term appreciation plays.

But this other side of the market offers a different kind of opportunity

Tactical buying of solid gold watches as raw material assets.

For investors and collectors, it’s a rare moment where metal value can de-risk the watch investment or even flip it into a short-term profit strategy.