The compass you have is a good model, I have used the Silva Ranger 15 CL for years which is very similar.

The compass needle can be effected by metal but it has to be quite close to the compass, I just wear my watch on the other wrist.

I did have a strange thing happen between a watch and a compass. I had a Timex Expedition watch with a built-in compass feature, for quick reference I slid a Brunton #9068 watchband compass on it. After a couple of months the polarity of the small watchband compass reversed 180*, the north arrow now points south even when it is not on the watchband? I think this must have been caused from being in close proximity to the electronic compass in the watch.

Mike