Watch Business update in Hong Kong

Watch Business Update - May 2024 

In recent times, the gold price has reached a historical high, standing at HK$26,500 per tael. During my visit to Chow Tai Fok yesterday to purchase gifts for Mother's Day, I was struck by the soaring price of gold. Such high gold prices indicate a lack of trust in traditional currencies, leading individuals to invest in precious metals, with gold being the top choice. 

The ongoing conflicts in the Middle East and Ukraine show no signs of resolution. Consequently, we anticipate that people will exercise caution when it comes to investing in luxury goods. Despite the fact that the wealthiest 1% of US citizens possess 30% of the country's wealth, it is uncertain whether this group will entirely divert their funds towards the watch business. Middle-class individuals, including managers, executives, investment bankers, IT professionals, businessmen, hotel managers, pilots, lawyers, and more, comprise the genuine supporters of the watch industry. Although not part of the super-rich class, Hong Kong residents are increasingly crossing the border to Shenzhen for weekend getaways, indicating a decrease in their willingness to invest as heavily as they did two years ago.

Comparing the current prices to those of May 2022, Rolex has experienced an average drop of 30%, Patek Philippe has dropped by 25% on average, and Audemars Piguet has experienced a 40% decrease. Vacheron Constantin is now offering its VIP customers the opportunity to purchase the new 222 model at the manufacturer's suggested retail price (MSRP), which was not possible in 2023. However, there have been few actual transactions for used Rolex watches among the 500 dealers in Hong Kong. It remains unclear whether prices have reached their lowest point, but it is expected that they will fluctuate in a U-shaped pattern before potentially rising again, particularly towards the end of the year following the replacement of US President Biden with Trump. 

Considering the current market conditions, it is advisable to invest in gold watches rather than stainless steel models, as the former holds greater value. Personally, I have ceased purchasing steel watches and shifted my focus towards high-quality gold timepieces. 

It is worth noting that the attached picture depicts TST 1881, where luxury shops such as JLC, Roger Dubuis, IWC, Cartier, Vacheron Constantin, and Panerai were present two years ago. However, at present, these establishments remain closed.

Thank you for reading. 

HK Snob