How Much Is Olympic Gold Worth?
By: Robert Hum
Even amid steep drops in precious metal prices over the past couple of years, the gold medal awarded over the next couple of weeks at the Sochi Winter Olympics features $581 worth of gold and silver – still making it one of the more expensive gold medals in recent Olympics.
Weighing in at 531 grams, this year’s Olympic gold medal is plated with the required 6 grams of gold and contains 525 grams of silver. Despite the prize’s name, the silver in the Sochi Olympic gold medal accounts for almost 60% of the medal’s value and is worth nearly $100 more than the medal’s gold content. With $243 worth of gold in each gold medal, over $100,000 in gold was used to produce all of the gold medals for this year’s Olympic and Paralympic Games.
Sochi Olympic Gold Medal
Gold value: $243
Silver value: $338
Total value: $581
Not quite the most expensive gold medal in recent years
Due to the pullback in commodity prices over the past several months, this year’s Olympic gold medal is less expensive than its predecessor from the 2012 London Olympics. In the 18 months since those Summer Games, gold prices have tumbled over 22% and silver prices have plunged over 27%. However, because of the heavier weight and substantially greater silver content, the value of the Sochi Olympic gold medal is just 11% below the original value of the gold medal awarded at the 2012 Olympics. Recall that the London Olympics were held one year after prices of both precious metals peaked at lofty new highs.
Even with the recent drops in gold and silver prices, athletes at the Sochi Olympics are receiving a gold medal that is still about $100 more expensive than the equivalent medal from the previous Winter Olympics in Vancouver. Even though both medals are roughly the same weight, gold prices are currently 15% higher than they were at the start of the 2010 Vancouver Games, while silver is almost 30% above levels from 4 years ago.
Too expensive to be all gold
Olympic gold medals have not been made out of solid gold since the 1912 Stockholm Olympics, with silver (priced today at about $20/troy ounce) being much more cost-effective than gold. At gold’s current price of $1,259/troy ounce, if the Sochi gold medal were made of pure gold, the medal would contain a stunning $21,000 in gold. Few medals today are made of pure gold, but those that still are include the Nobel Prize and Congressional gold medals.
Not just about the medal’s metal
While it’s easy to put a value of the medal’s gold & silver content, it’s impossible to put a price on winning Olympic gold. Athletes, who reach the pinnacle of their sports, often enjoy added benefits of national pride and celebrity, which can in some countries lead to corporate endorsements that could potentially bring in millions of dollars for the athlete.
Note: The value of previous Olympic medals is determined by the gold & silver futures prices from the day of that Olympics’ Opening Ceremony. All prices are in nominal terms and are not adjusted for inflation.
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