Michael Phelps has accomplished a seemingly impossible feat, winning eight gold medals at the Beijing Olympic games. That is the most gold medals ever won by an athlete in a single Olympic games!
As a gold investor like myself, you’ve probably wondered what the value of Michael Phelps Olympic medals are.
Let’s see if we can figure it out.
First, let’s determine what the gold portion of the medal would be worth.
According to the Olympic Charter, the gold and silver medals must consist of 92.5 percent pure silver. The gold medal must be coated with at least six grams of gold.
In the futures market, a tradable unit of gold is one hundred troy ounces emblem.
One troy ounce is equal to 31.1 grams
For illustrative purposes, let’s assume there is six grams of gold in each gold medal.
Friday’s closing gold futures (for December delivery) price was $792.00.
To figure out the price of one gram, we would divide the gold price of $792.00 per troy ounce by 31.1. Then we would multiply that figure by six, to arrive at the price for six grams.
So using the current price of gold per ounce, the value of the gold contained in an Olympic medal would be worth around $153.00.
Now let’s figure out how much the silver portion of the medal would be worth.
We’ll also use Friday’s closing silver futures price.
At $12.82 a troy ounce, the silver portion (41 cents times 92.5 grams) of the Olympic medal would be worth $38.13.
That all adds up to an estimated value of about $191.00. Of course, the price of gold and silver fluctuates on a daily basis. So the value of the medal itself will depend upon how the metals markets are performing at the time of the calculation.
Let’s not forget that this year’s Olympic medals also include an inlaid ring of Jade. The inclusion of that precious gem will also impact the value.
The true value of an Olympic gold medal is more than just the composition of the raw materials, however.
Think about just what Michael Phelps has accomplished:
He became the the first athlete to win 8 gold medals in an Olympic Games
He swam 17 times in 9 days.
He swam against 239 competitors in individual events alone!
He smashed 7 world records!
He set 4 world records in individual events.
In the 200 meter butterfly, he swam a majority of the race with water-filled goggles and was unable to see. Despite this, he broke the world record!
In the 100 meter fly, he won the race by a mere 1/100th of a second!