Luxury Watch Material Pricing: Steel vs. Gold vs. Platinum

andrewluff · 2016-10-14T14:56:17Z

Andrewluff questions luxury watch pricing: why are gold and platinum cases so much more expensive than steel? Explore material costs, manufacturing, and market value.

andrewluff

WPS member · Horological Meandering forum

37 replies11260 views6 photos

Andrewluff initiates a thought-provoking discussion on the pricing strategies of luxury watch brands, particularly concerning the significant price differences between steel, gold, and platinum cases. He challenges common perceptions about material costs and manufacturing difficulty, drawing on insights from a watchmaker and personal experiences.

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and a mountain of all other materials we see cases made in these days. How are they priced? Why are they priced that way? Are they rarer in one material or the next?

Recently we have seen in the auctions, vintage steel models going for crazy prices such as some of the Pateks, is this just because they are Patek and are from the good times of the brand when they were producing beautiful timepieces?

Do watch brands believe that because a steel Patek (for example) was made 40 years ago in a small number, that all steel watches should increase in price? I remember discussing a special watch to be made in platinum a few years back (one that I really wanted) but when the quote came through the premium for the favour to have it in this case was CHF20,000. I enquired to the reason and was told that platinum for one is expensive and also was very hard to work with, therefore the tooling and time spent was much more expensive. My answer... thank you for the favour... but very politely... no thank you!

So, this came back into my mind this week at the release of the new Chopard Time Traveller and a discussion I had on that day with a watchmaker. Chopard is not alone, but is the one that bought it back to me, so looking at the numbers:

Steel: GBP10,040

Gold: GBP17,650

Platinum: GBP27,610

Basically, you are buying the exact same movement, finished in the same way, the same strap and just a different combination of dial. The difference is in the case, crown and the buckle made of the precious stuff.

So... I posed some questions to this watchmaker again (non-Chopard I should add)?

The gold version is almost 2 times the price of the steel and the platinum version is almost 3 times, why would this be? His answer (roughly)... well people perceive gold or platinum to be more expensive, therefore watch brands charge a lot more. In reality, the cost of the gold or platinum in most of the cases is very little when compared to the price.

OK... but then my next point was, well I can understand platinum being more than gold as it costs more, so that makes sense? His answer - Wrong! Platinum is cheaper to buy than gold (I did not know this, but now I used my friend Google, I can see it has been since 2011!).

Finally... I am feeling a little deflated at this point but have a good argument from when I was trying to commission my watch... so, platinum requires all special and more expensive tools? Answer: not really... with modern machinery the cutting of the cases is done by the same machine.... but it does take longer to get the hand finishing and polishing due to the density of the material.

OK, one last question... Well I am lost on the platinum argument, but what about gold, is that harder to work than steel? Answer: No. Gold is far easier to work with, especially if the pieces are hand finished and polished.

Well guys, what have I missed... or is it like the magicians cup trick when you always lose?

Cheers

Andrew

Key Points from the Discussion

Luxury goods, including high horology watches, are not priced solely on a 'cost plus' model; marketing and perceived value play a much larger role than the actual material cost or manufacturing difficulty.
Comparing precious metal prices by weight (currency per ounce/gram) is misleading; a more accurate comparison for watch cases requires considering volumetric price (grams per cubic centimeter) due to differing material densities.
Platinum has been cheaper than gold since 2011, contradicting the common perception that platinum is always more expensive, yet platinum watches often carry a significantly higher premium.
Modern machinery makes cutting cases from various materials, including platinum, less distinct in difficulty, though hand-finishing and polishing platinum can take longer due to its density.
Gold is generally easier to work with than steel, especially for hand-finishing and polishing, further questioning the substantial price premium for gold cases.
Titanium is approximately twice as expensive by volume and four times by weight compared to stainless steel, and is harder to work with, yet often carries a relatively small premium.

The Discussion

piccolochimico (aka dsgalaxy1)

Oct 14, 2016

Gold and platinum are rare, hard to work and finish....fairy tales accepted by the 99% of unaware customers. Truth is that, for instance, titanium is even harder to work with: the alloy burns in contact with oxygen, so the operations must be held in a controlled environment (chamber saturated with inert gas). I appreciate brands like Hublot when develop new alloy, like magic gold. I'm still waiting for some new aluminium case, because some alloys have been used for building warship cannon. Today

cazalea

Oct 14, 2016

or so I have been told. It was when I worked in the aircraft fabrication business but then we weren't using those multi-axis machines - it was just a group of guys and huge bandsaws and an average of 9 fingers each. My hunk of raw titanium ore (amazing what you can buy on eBay) for very little cash. Titanium is approximately twice as expensive than stainless steel (by volume) or four times as expensive (by weight), and harder to work! there's very little premium (in most cases). NOTE: to get an

Joepny

Oct 14, 2016

I have a hard time buying new because the Swiss/German manufacturers place a crazy premium on the precious metals. Really agree with the point you're making. That's why the manufacturers market desirability, emotions, and lifestyle non-sense because it's all made up junk. When you buy pre-owned, you can see a more realistic picture of what the true value is; typically the gap between pre-owned pt vs. gold is much smaller than the >50% gap on the new prices. Even in pre-owned, Pt still typically

cazalea

Oct 14, 2016

I couldn't find a watch I liked (new) that I could bear to buy, and nice used ones are pretty rare - often set with diamonds or the like. I nearly grabbed a blue-dialed IWC Flieger but in the end went for the skeletonized Credor dress watch for the same money. Cazalea

Joepny

Oct 14, 2016

but no pt watch. I've sort of converted to just steel for the foreseeable future...

MCG (Markus)

Oct 14, 2016

perceived value - i.e. Marketing

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Luxury Watch Material Pricing: Steel vs. Gold vs. Platinum

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