During the first week of February, at the peak of gem show season in Tucson, Ariz., Freddy Keshmiri of Keshmiri Art & Antiques Corp., a vintage watch dealer in Beverly Hills, Calif., showed off a case full of Swiss watches at the GJX trade show, located in a large tent across from the city’s convention enter. Heavy on precious metal Piaget models from the late 1960s and ’70s, including fetching styles bearing turquoise and lapis dials, Keshmiri’s inventory was conspicuous for two reasons: In a sea of loose gemstones, from aquamarine to zircon, his display of timepieces stood out. And two: all that gold.

The price of the precious metal peaked at $5,414 per ounce on Jan. 28, five days before GJX’s opening, and was trading for $5,012 on the day of Robb Report’s visit. The metal’s dramatic surge in price—a year ago, gold hovered around $2,800—not to mention its recent volatility was all anyone could talk about.

“A lot of my colleagues are melting all these types of watches,” Keshmiri said, pointing to an unusual Piaget that he called the “Vampire,” a 1977 model with fang-shaped cutouts in its gold bracelet. “I wouldn’t do it. It feels like I’d be killing someone. But it’s been going on for the past two to three months.”

At a time of record gold prices, many timepieces’ melt value exceeds what they trade for in the marketplace, and as a result, cash-hungry dealers are pouncing. “We’re seeing more people liquidate gold watches purely for their metal value, particularly with certain brands and older pieces,” Eugene Tutunikov, CEO of SwissWatchExpo, tells Robb Report. “In some cases, watches are being treated like scrap gold rather than collectible timepieces, which is unfortunate—but it’s also quietly reducing the supply of vintage gold watches that survive in good condition.”

Tutunikov notes that a dealer recently came into the SwissWatchExpo showroom in Atlanta and bought a couple vintage Audemars Piguet pieces, including a stylish Bamboo wristwatch, as well as a few Breitling models with the sole intention of melting them. “It’s kind of a heartbreaking scenario but he was paying full price and we couldn’t say no,” Tutunikov says.

The phenomenon isn’t restricted to dealers. “A lot of people are rediscovering gold they’ve inherited and deciding to sell it, and that often includes vintage watches,” Tutunikov says. “Some of these pieces have real horological and historical value, but they’re being viewed through the lens of commodity pricing. Over time, that creates scarcity—and scarcity tends to elevate the value of the watches that remain in circulation.”

Demand for gold watches, according to Tutunikov, has remained steady, largely because prices on the secondary market haven’t risen in tandem with the metal price. “That creates a lot more value,” he says. “Customers see gold is over $5,000 an ounce. It’s almost subliminal. They’re gravitating to gold because they want that heavy, tangible value on their wrist. And for some customers, it’s that extra flex they’re looking for.”

Linden Lazarus, CEO of WatchCheck and founder of the pre-owned dealer Oliver & Clarke, has seen a similar phenomenon. “The rise in the gold market has definitively increased interest in high gold content watches, as buyers are attracted to increased intrinsic value of the pieces,” he says. “Knowing that you could sell your watch for a very attractive scrap price makes the justification for buying such an item even more comprehensible. We’ve seen the market respond to this with a steady rise in value of heavy gold watches, like the Rolex President, which has become even more valuable because of its incredible iconism combined with its rising intrinsic value.”

In recent weeks, however, refineries in the U.S. that accept gold trade-ins have been so overwhelmed with gold that they’ve had to pause payments and stop accepting new trade-ins, says Adam Golden, founder of the Miami-based vintage watch dealer Menta Watches. “Since the price shot up, the major refiners doing $50 million a day in gold have been so backlogged that they had to close down operations for two weeks,” he says. “They won’t accept any more gold until they can catch up on payments. And because prices are so volatile they will only lock in a price when they’re ready to send it to you. So yes, watches were getting melted because they’re worth more as gold than as watches. But now you can’t even do that.”

At the time of gold’s peak, Golden says he heard that even Rolex models such as the Sky-Dweller were being scrapped. “They’ll take out the movement but melt the rest because the market value of the watch at the time was less than the gold price,” he says. More often, however, the most likely candidates for melting tend to be “less popular” watches like Baume & Mercier.

“Most of the time, the more important or cooler watches aren’t getting melted,” Golden says. “You hear the odd story but generally you’re getting watches melted that nobody really wanted. It doesn’t really affect the supply. But when gold goes up, it makes it harder to buy inventory.”

Golden pointed to a 34 mm Rolex date model from the 1960s or ’70s as an example. “We sell them around $7,000,” he says. “It’s a solid-gold Rolex, but it’s not a Datejust, which could be $10,000. I was offered one about three or four weeks ago. I offered $6,500. The guy writes back and says, ‘This watch melted is $8,500 now.’ I don’t know what to say to that. I’ve never sold one for $9,000 or $9,500.”

The bottom line: If you’re looking to buy a precious metal watch, it’s going to cost you more. But keep in mind that rising gold prices haven’t changed the calculus of pricing for the most sought-after watches—say, an 18-karat yellow-gold Rolex Day-Date ref. 18038 with a factory blue dial. Golden says the model typically sells for $20,000, compared with $15,000 for a Day-Date with the more common champagne dial.

“I’m not going to charge $22,000 for that watch because I’m still above the cost of gold,” Golden says. “I have noticed more people asking me how much something weighs. But most watches are priced so much higher than the cost of their gold weight that it doesn’t really matter. If gold catches up, we’ve got bigger problems.”