San Francisco, CA (PRWEB) June 28, 2006
“With gold topping out at more than $700 an ounce last month – and forecasters predicting higher valuations ahead – jewelers who trade in the pre-owned Rolex market may be forced to raise prices as much as 30 percent long before the Christmas buying season begins,” says San Francisco gemologist Avi Dayan.
“Climbing interest rates, the weak U.S. dollar and the war in Iraq have made gold and other precious metals more valuable than they’ve been in 25 years. Experienced Rolex collectors are keeping their eyes on the price of gold,” he says.
“Some consumers believe it’s only new Rolex watches that are affected by soaring gold prices – but that’s not the case. The cost of merchandise in the pre-owned Rolex market is directly affected by activity in the new Rolex arena,” says Dayan.
Dayan says Rolex SA, the Swiss company that began manufacturing luxury wristwatches in 1905, vigilantly controls the market. "You'll never see Rolex flood the market," he says. "You'll never see an oversupply of new Rolex watches for sale.”
Such controls make new Rolex watches scarce, says Dayan, who is a graduate of the Israeli Gemological Institute. “As a result, some jewelers deliberately hold back inventory during unstable times, banking on a better price later. If the price of gold continues to go up, by Christmas, those same retailers will be pulling their Rolex merchandise out of the case, adjusting the price upward and making a handsome profit.”
Dayan says jewelers must answer the question: "Should I charge the consumer what I paid for the watch, or should I charge what it’s going to cost me to replace it?"
He says there is no scarcity of watches In the used Rolex market. “While the price of used Rolex watches is impacted by steeply rising gold prices, preowned inventory is not held back because a worldwide network of buyers continually provides a quality supply. "There is just no incentive for a used Rolex dealer to hold back,” he says.
“Typically, there is lag time between rising prices in gold and higher costs for watches,” says Dayan, “but eventually the lag time ends and the higher prices begin. When the pre-owned Rolex network is forced to pay from10 to 30 percent more for a timepiece than they paid for a similar watch only a couple of months earlier the higher cost is passed on. Soon," he says, " the increased cost filters down to the doctor’s wife who wants to surprise her husband with a Rolex on Christmas morning.”
The gem expert says prices on the Rolex President -- considered the company's most opulent timepiece-- could spike as much as 10 percent and various gold and stainless steel models face the possibility of a 30-50 percent increase. "The gold market is putting pressure on the Rolex market and consumers may pay for it before summer’s end."
For more information about the impact of rising gold prices on the pre-owned Rolex market, contact Avi Dayan, owner of San Francisco-based A&E Watches at (415) 437-3263.
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