What's the Cost of Olympic Gold?
Gold Medal Trivia Question: Which of the following is/are made out of solid gold?
a) Olympic Gold Medal
b) Nobel Prize Gold Medal
c) Congressional Gold Medal
(The answer is at the end of this post.)
What is the value of Olympic gold?
Ask the athletes, and they'll say it’s all the years of training, dedication, perseverance, hardship, sweat, and pain they've endured on their path to Olympic glory. But ask a CNBC "By the Numbers" blogger, and he'll tell you the price of Olympic gold is about $501*.
(*Note: includes the value of the primary metals commodity value only and excludes labor cost)
In fact, this year’s Olympic medals are some of the most expensive in recent years – partly due to the rise in metal prices and partly due to the record weight of the medals themselves.
While modestly off their all-time highs, current gold, silver, and copper prices remain at relatively high levels. However, that certainly didn’t deter the Vancouver Olympic Committee from creating a very worthy medal for the top athletes on snow and ice.
Weighing between 500 grams to 576 grams (depending on the particular medal), the Vancouver medals are the heaviest medals ever. The prior record: medals from the 2002 Winter Olympics in Salt Lake City, which weighed between 454 grams and 567 grams. (Note: 454 grams = 1 pound.)
Olympic gold medals actually contain more silver than gold. The International Olympic Committee requires gold medals to be made up of 92.5% silver and just 6 grams (0.19 troy ounces) of gold.
Based on prices the day the Vancouver Games began (Feb 12), this year’s gold medal contains $210 worth in gold and $290 in silver ($501 total). That’s a vast contrast to the gold medals from the Salt Lake City Olympics, which had $59 in gold and $82 in silver ($141 total) – based on metal prices from February 8, 2002, the first day of those Winter Games.
Bottom line: while the weights of the 2002 and 2010 gold medals are fairly comparable, the rise in metal prices over just the last 8 years have made this year’s gold medals approximately 2.5 times more expensive to produce today. Since the 2002 Olympics, gold futures have soared 258%, while silver futures are jumped 247%.
Total Medal Value: Beijing vs. Vancouver
The Winter Games have always been a more intimate event than the summer games. Case in point – at the 2008 Summer Olympic Games in Beijing, more than 10,000 athletes participated in over 300 events, dwarfing the over 2,600 athletes now competing across only 86 events in Vancouver.
Keep reading for the trivia answer
With many more events, a significantly greater number of medals were created for the Beijing Games. Between both the Olympic and Paralympic Games, 1,014 medals were produced for the Vancouver Games, while 6,000 medals were made for the Beijing Games in 2008.
Yet despite the need for nearly 5,000 FEWER medals, the total cost of the gold, silver, and copper (copper is the primary metal in the bronze medal) needed for the Vancouver medals was almost $49,000 MORE than the cost for the metals required to produce all 6,000 Beijing medals.
Why? Partially because of the rise in gold prices (up 27% since the start of the Beijing Olympics), and more significantly, the need for far more silver. Beijing’s medals only weighed slightly over a quarter of the weight of Vancouver’s medals. As a result, at just 150 grams, Beijing’s medals required much less silver and copper. Recall that Vancouver’s medals weigh between 500 grams to 576 grams.