By Steve James
NEW YORK (Reuters) - Greece waited 108 years to host another Olympic Games. Unfortunately it came just as a boom in world metal prices has sent the cost of winners' medals through the stadium roof.
At approximately $400,000 for the metal content of the 3,000 Athens medals alone, it may be just a drop in the Aegean Sea compared to an estimated $8.6 billion total Games cost.
But cost-conscious organizers can hardly have expected that the price of gold would increase approximately 45 percent since the summer Games in Sydney four years ago, or that silver would go up 35 percent and copper -- the key metal in bronze -- would cost 42 percent higher than in 2000. Considering that the medals struck for the Athens Games used 13 kilos (417 ounces) of gold and approximately one ton each of silver and bronze -- an alloy of 90 percent copper and 10 percent zinc -- that's a hefty increase in four years. By unofficial reckoning, it means the Athens Games needed over $166,000 worth of gold and $234,000 of silver for its medals.
The price of gold has risen dramatically since August 2000, when it was approximately $275 an ounce. It was hovering around $400 an ounce on Tuesday. Similarly, silver has risen from $4.90 an ounce when the Sydney Games were held, to $6.65 currently. Copper, which is around $2,700 a ton, was selling for $1,900 four years ago.
Not counting labor, the metal content alone for the Athens medals comes to more than $400,000, and the gold medals are not even pure gold. Not that the International Olympic Committee was considering solid gold medals -- the last medals of pure gold were awarded in Stockholm in 1912.
"That would be extremely heavy and extremely expensive," said Adrian Gostick of O.C. Tanner, a company that designs employee recognition awards and struck the medals for the 2002 Winter Olympics in Salt Lake City.
Nowadays, gold medals are actually made of silver, with a coating of six grams (about one-fifth of an ounce) of gold -- about $83 worth at current prices.
The Salt Lake medals weighed 1-1/4 pounds (20 ounces) "They were the heaviest ever made," Gostick told Reuters. "When calculating the value, don't forget that each took 40 hours to make, plus the R&D (research and development) time to create."
Precious metals analyst Jeff Stanley, of BMO Financial Group in New York, said gold and silver prices are closely related to the economy. Recent weakness of the dollar, plus higher oil prices have driven up the gold price, while silver tends to move in unison with gold, he said.
His colleague Victor Lazarovici, who follows base metals, said the copper price had virtually doubled over the past year as a result of strong demand in the West and demand growth for China's industrial expansion.
But world economics aside, the value of an Olympics medal is really incalculable. "It's not just a hunk of metal, it's something priceless for the winners," said Gostick.
Stanley agreed: "I think the winners would be quite happy to buy a medal if they had to."