These days, when you turn on the television and hear something about “gold fever,” you can bet it is the Olympics that the commentator is talking about.
I know you are a gold and silver enthusiast like me. So you are probably also curious… how much gold is really in a gold medal?
Would you believe that it is actually more silver than gold?
BUILDING A GOLD MEDAL
The Brazilian Mint has done a spectacular job with its iconic design, employing no less than 100 sculptors and machinists to produce almost 2500 medals in record time. One side has a beautifully-rendered image of the angelic goddess Nike racing in glory from a packed stadium.
The artistry and admiration value of these medals is undisputed. To win one, even a bronze, is basically everyone’s dream deep inside.
But the actual monetary value might surprise you:
GOLD MEDAL
Believe it or not, the 2016 Rio Gold Medal is more SILVER than gold. It is composed of 494 grams of silver, in fact, with only 6 grams of actual gold plating the exterior. The 6 gram gold content is actually the minimum allowed by the International Olympic Committee.
Actual Value: About $550 in precious metals value per medal.
SILVER MEDAL
The 2016 Rio Silver Medals have 500 grams of sterling silver each.
Actual Value: About $300 in precious metals value per medal.
BRONZE MEDAL
The 2016 Rio Bronze Medals are made of 475 grams of copper and 25 grams of zinc. (We went ahead and computed the value of those components, but I’m not sure it was worth the effort.)
Actual Value: Only about $2.50!
All told, there are 812 gold medals in Rio this year, consuming over $200,000 in gold. The silver used in both gold and silver medals (of which there are also 812) is worth over $500,000.
Interesting, right? This was a fun exercise.
But the numbers above just go to show how valuable — and unique — human achievement really is. Much more so than any financial reward could be.
Here’s one final trivia fact for you, courtesy of CNN:
Can you guess the last time gold medals were actually made of pure gold?
Answer: the 1912 Summer Olympics in Stockholm, Sweden.
Hold On For A Rocky Ride This Fall
With gold trending below recent highs in the last week, we are getting calls from our clients asking if it is time to consider further accumulation.
Look around you, you’ll see that the same troubling factors are still at play in the broad global economy. Here is a sampling:
Despite recent talk of possible Federal Reserve rate hikes, U.S. interest rates are still far below historical standards;
Regardless of their politics, everyone basically agrees that this fall’s election season will be an exceptionally wild ride for the markets;
The globe is in the midst of a worldwide economic slowdown, as evidenced by major players like China and Japan that are currently staggering;
Negative interest rates are generally the rule abroad, taking an as-yet-undetermined toll on the financial system;
Central banks continue to purchase gold and silver. Plus, there has been a recent resurgence in hedge fund buying in the wake of the last Federal Reserve meeting;
There is growing awareness among everyday investors that precious metals are common-sense diversification assets that can protect wealth in turbulent times.
This isn’t to say that gold can only go up from here. No market moves in one direction all the time.
However, if you take a minute to consider the overall somber global economic picture and the scary fall ahead, gold and silver hardly seem to be priced correctly where they are today (at way below their historic highs). The stock market, on the other hand, is clearly running on fumes at this point.
For many investors, though, possible price appreciation is not the only appeal of precious metals. The recognized diversification value of gold and silver is as true today as is has ever been.
Peace of mind is worth a lot right now!
