A gold pocket watch presented to the captain of a steamship which rescued more than 700 passengers from the Titanic has sold for a record-breaking £1.56m.

The sum – the highest amount ever paid for Titanic memorabilia – was paid by a private collector in the US, said auctioneers Henry Aldridge & Son of Devizes, Wiltshire.

The previous record was set in April, when another gold pocket watch, recovered from the body of the richest man on the ship, John Jacob Astor, sold for £1.175m.

Both sale figures include fees and taxes paid by the buyer, the auctioneers said.

Astor was 47 when he went down with the ship in 1912, after seeing his new wife Madeleine on to a lifeboat.

The watch sold on Saturday was given to Captain Arthur Rostron by Madeleine Astor and two other widows of high-profile and wealthy businessmen, who were also lost when the Titanic sank.

Rostron was skipper of the RMS Carpathia, a Cunard Line transatlantic passenger steamship that rescued 705 survivors from the Titanic’s lifeboats.

The 18-carat Tiffany & Co timepiece bears an inscription reading “Presented to Captain Rostron with the heartfelt gratitude and appreciation of three survivors of the Titanic April 15th 1912 Mrs John B Thayer, Mrs John Jacob Astor and Mrs George D Widener”.

Rostron received the gift from Mrs Astor’ at a lunch at the family’s mansion on Fifth Avenue, New York, according to the auction house.

Auctioneer Andrew Aldridge said: “It was presented principally in gratitude for Rostron’s bravery in saving those lives, because without Mr Rostron, those 700 people wouldn’t have made it.”

Aldridge said the sale demonstrated the “enduring fascination” with the story of the Titanic.

He added: “For historians, they are very interested in the nuts and bolts of Titanic, if you like. She’s 882ft long, she weighs 46,000 tons, etc, etc, etc.

“For collectors, it’s a different animal, they are interested in people. Every man, woman and child had a story to tell, and those stories are told over a century later through the memorabilia.”

The violin that was played as the ship sank held the record for the highest amount paid for Titanic artefacts for 11 years, after being sold for £1.1m in 2013, the auctioneers said.

Aldridge said the fact that this record has been broken twice in the past year illustrated that there is an “ever-decreasing supply and an ever-increasing demand” for memorabilia related to the ship.

Prices for the artefacts are going up “exponentially”, he said.