If it was the Gold Watch, if relisting, you MUST use Special Delivery. Royal Mail will not pay any compensation for loss or damage unless you se the correct method of postage.
1st Class is only suitable for items up to £20 and in no circumstances would it cover GOLD. Using the incorrect method of postage is an invitation to scammers that they can get the watch for FREE, by claiming non receipt. You have no option but to refund, if you don't ebay would do it at your expense.
