How Much Is an Olympic Gold Medal Really Worth?
There are three components to the value of an Olympic gold medal. First, there is the price that can be fetched by selling the precious metal used to make it, which should be a respectable sum but still fall far from its total value. Second, there is the prize that is awarded to Olympic winners, which can see significant differences between different countries provide different levels of support to their Olympians. Third, there are the potential endorsements that come with an Olympic win, which are not guaranteed but the next closest thing to it, particularly when Olympic winners are either marketable or rare in their countries or both. As a result, calculating the value of an Olympic gold medal is neither simple nor straightforward, though there are plenty of statistics out there that can be used to come up with useful estimates.
What Is the Physical Value of a Gold Medal?
First and foremost, it is important to note that an Olympic gold medal is not made out of pure gold. In part, this is practical because pure gold is soft and malleable, meaning that a medal made out of pure gold would be too damageable to withstand the test of time. However, this is also financial because pure gold has become so expensive that making all of the medals out of pure gold would be a ruinous expense for the host, particularly since more and more of them would have to be made on a quadrennial basis.
Instead, an Olympic gold medal is made out of precious metals in accordance with the guidelines laid out by the International Olympic Committee, which leave plenty of room for interpretation on the part of the host. For example, an Olympic gold medal must be made out of at least 92.5 percent silver as well as a minimum of 6 grams of gold. Furthermore, an Olympic gold medal must be at least 60mm diameter as well as 3mm thick. Other than these as well as other guidelines, the hosts are free to make their own decisions when it comes to their own Olympics, meaning that there can be significant variation in the amount of precious metals used to make their gold medals.
As a result, there is no single estimate for the physical value of an Olympic gold medal, though calculating it is a simple and straightforward matter. In short, its physical value is equal to its precious metals multiplied by the prices being paid for those precious metals on the open market at the moment, which can fluctuate a fair amount over the course of years and years. For example, the price of a single ounce of gold came close to $2,000 at its height after the Great Recession, but at the moment, it has fallen a fair amount from that point. This is because gold as well as other precious metals to a certain extent are counter-cyclical in nature, meaning that their prices rise in bad economic times as frighten investors flock to them based on a popular perception that they are safe refuges and vice versa.
Generally speaking, the physical value of an Olympic gold medal has been estimated by Karus Chains to be around $500. In contrast, an Olympic gold medal made out of pure gold from the start of the 20th century would be around $20,000.
What Is the Non-Physical Value of a Gold Medal?
With that said, most of the value of an Olympic gold medal consists of what it can mean for the Olympic winner. In main, this consists of the endorsements that can be directed towards them by interested businesses, but the prizes for an Olympic win should be mentioned as well.
In brief, countries pay their athletes for their Olympic wins, both as a way of honoring their achievements and as a way of encouraging them to do their best. For example, the United States Olympic Committee is said to pay $25,000 for a gold medal, $15,000 for a silver medal, and $10,000 for a bronze medal, which puts it at the middle when it comes to what countries will pay their athletes for their Olympic wins. To elaborate, Singapore has been known to offer as much as $753,000 for an Olympic win, while India and Russia have been known to offer $160,000 and $60,000. China is another example of a country that has been known to be generous when it comes to this particular matter, seeing as how it has been known to shower its Olympic winners with cash, cars, and homes. Of course, there are also countries such as Norway, Sweden, and the United Kingdom that offer their Olympic winners no bonuses whatsoever, whether because they do not see the need or because they disagree with the practice.
Regardless, the endorsements that come with an Olympic gold medal are likelier to prove more lucrative, though the exact sums can see significant variation based on a significant number of factors. For example, some events are more popular than others, meaning that the Olympic winners in those events can expect bigger endorsements. Furthermore, some athletes are more marketable than others, whether this is because of their looks, their public persona, or the sheer extent of their achievements. For an extreme example of how much an Olympic winner can earn in endorsements, look at Michael Phelps with his more than 20 gold medals, who is said to have more than $50 million in his net worth.
Finally, it should be noted that Olympic gold medals have been put up for sale on previous occasions for a number of reasons, which provide one of the simplest and most straightforward methods for evaluating their value. Unfortunately, since one Olympic gold medal is not the same as the next, this is most useful for gauging the value of a particular Olympic gold medal rather than all of them in general. For example, the Olympic gold medal from Jesse Owens’s legendary victory at the 1936 Berlin Olympics fetched $1.4 million at auction, while the Olympic gold medal from Mark Wells, a member of the “Miracle on Ice” hockey team sold for $310,700. Other Olympic winners have sold theirs for even smaller sums in the thousands of dollars.