Fun On Friday: Olympic Gold Shines Like Silver
I’ve got bad news for all you aspiring Olympic champions out there. Your gonna get hosed. Your first-rate effort will win you a second-rate prize.
Get this – the Olympic gold medal is mostly made out of silver. True story. The gold medal is actually formed mostly out of silver coated with about 6 grams of gold plating.
So, gold medal winners – for all practical purposes – you’re getting a silver medal.
Sorry about your luck.
Still, silver is nothing to sneeze at. According to the International Olympic committee, the 2018 Winter Olympic gold medal is made out of 99.99% pure silver and weighs 586 grams. That’s the same purity as a US Silver Eagle bullion coin. If you do the math using the current price of silver, the silver in the gold medal is valued at about $319.
And with the price of gold over $1,300 per ounce, that six grams of gold plating is also worth a little bit of bank – over $254 to be exact.
So, maybe the winner isn’t getting hosed as badly as it seems.
The 2018 Winter Olympic athletes will compete for a lot nicer medals than the summer folks did in Rio. Brazil did their medals on the cheap. According to the Brazilian mint, its gold medals were made from silver with only a 95.5% purity. And Rio 2016 medals were produced using 30% recycled materials. I don’t know what that means really. When I hear “recycled materials,” I think of old tires being turned into garbage bags or something like that. I don’t know if the Rio Olympic medals had old tires in them, but you never know. If you remember the stories of garbage in the water creating obstacles for Olympic sailors, it might have been fitting.
Anyway, all told, the Koreans used about 50 ounces of gold to make all of their gold medals. At the current price of gold, that comes to over $65,000. That’s a pretty hefty price tag. I can see why they skimp on putting a lot of gold in those gold medals.
The Koreans spent a lot more on silver than they did on gold. It took about 9,659 ounces of silver to manufacture both gold and silver medals. With silver prices currently trading over $17 an ounce, the total value of all the medals comes in at over $164,200.
So what about the bronze medal winners? They might as well not even bother. Those medals are formed of about 90% copper and 10% zinc. They weigh 493 grams each. The bronze medal is pretty much the penny of Olympic medals. But hey – what do you expect to get for coming in as the second loser?
It’s interesting that the tiny amount of gold in the gold medal is only worth about $70 less than the much larger amount of silver. This actually isn’t the norm. The silver-gold ratio is historically high right now. It currently stands at over 77-1. That means it takes 77 ounces of silver to buy one ounce of gold. In modern times, it has averaged around 40-1. In other words, silver is way undervalued – historically speaking – compared to gold. That means the gold medal winners are getting a little bit better deal than they would if the ratio was closer to normal.
It also means its probably a good time to buy silver.
Fun on Friday is a weekly SchiffGold feature. We dig up some of the off-the-wall and off-beat stories relating to precious metals and share them with you – with tongue firmly planted in cheek. Click here to read other posts in this series.
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