Rolex's latest price increases, reaching up to 8 percent on some models, signal a broader industry challenge as precious metal costs continue to pressure luxury watchmakers' margins. The move comes as gold prices maintain their upward trajectory, forcing high-end watch and jewellery manufacturers to reassess their pricing strategies. Last year Rolex raised its prices by about 4 percent.

The Geneva-based watchmaker has implemented its most significant price adjustments on gold models, with its yellow gold GMT-Master II climbing to 44,600 euros from 41,300 euros, reported Bloomberg, while the yellow-gold Day-Date with a 40-millimeter black dial now commands 44,200 euros up from 41,000 euros. The steeper increases on gold models reflect the direct impact of surging commodity prices on production costs.

In contrast, steel models saw more modest adjustments, with the iconic Submariner receiving a 2 percent increase and the coveted Cosmograph Daytona rising by 3 percent, according to Yahoo Finance. This differential pricing approach highlights the varying cost pressures across different product segments.

Industry analysts suggest these price adjustments may herald a new wave of increases across the luxury watch sector, as manufacturers grapple with elevated raw material costs. The trend could particularly affect brands heavily dependent on precious metals for their flagship collections.

The price hikes come at a time when the luxury sector is navigating complex market dynamics, including shifting consumer preferences and global economic uncertainties. While demand for high-end timepieces remains robust, key markets like Asia have seen a decline in demand, and the industry faces the challenge of maintaining profitability without alienating its customer base.

For retailers and collectors, these increases could reshape the secondary market, where certain models already command significant premiums. The higher retail prices might also influence buying patterns, potentially driving increased interest in steel models or alternative luxury watch brands, as the price of gold continues to rise.

The ripple effects are likely to extend beyond watches into the broader luxury jewellery sector, where manufacturers face similar pressures from rising gold prices, which by the end of 2024 had surged 27 percent. Brands may need to innovate in their material choices and manufacturing processes to maintain competitive positioning while preserving their luxury status.