AmeriServ Presents: Bank Chats

Gold Prices, Myths, And Medals

• AmeriServ Financial, Inc. • Episode 29

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Gold’s glow is hard to ignore when prices hover near highs. In this episode of 2 Cents, Drew and Jeff pull back the curtain on how gold prices are set, how to buy gold, and some other fun gold factoids surrounding the Olympics and St. Patrick's Day.


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Credits:
An AmeriServ Financial, Inc. Production 
Music by SchneckMind
Hosted by Drew Thomas and Jeffrey Matevish

Thanks for listening! You can find out more about AmeriServ by visiting ameriserv.com. You can also find us on Facebook, Instagram, and Twitter.

DISCLAIMER
This podcast focuses on having valuable conversations on various topics related to banking and financial health. The podcast is grounded in having open conversations with professionals and experts, with the goal of helping to take some of the mystery out of financial and related topics; as learning about financial products and services can help you make more informed financial decisions. Please keep in mind that the information contained within this podcast, and any resources available for download from our website or other resources relating to Bank Chats is not intended, and should not be understood or interpreted to be, financial advice. The hosts, guests, and production staff of Bank Chats expressly recommend that you seek advice from a trusted financial professional before making financial decisions. The hosts of Bank Chats are not attorneys, accountants, or financial advisors, and the program is simply intended as one source of information. The podcast is not a substitute for a financial professional who is aware of the facts and circumstances of your individual situation. AmeriServ Presents: Bank Chats is produced and distributed by AmeriServ Financial, Incorporated. 

Jeff Matevish:

Okay, okay, yeah, hey, it's, it's March. I'm wearing my green because it's St. Patrick's Day month.

Drew Thomas:

You are, that's fantastic, I'm not.

Jeff Matevish:

I want to be festive today.

Drew Thomas:

I'm wearing gray. I'm feeling very cloudy today, apparently.

Jeff Matevish:

Well, around here that, that would be fitting, yeah.

Drew Thomas:

Yeah, around here, or like the area?

Jeff Matevish:

Yeah, yeah, our geographical location, yes, yes, yes, yeah, no, got you, so, yeah, so March. So, we're going to talk about gold and a little bit of the, you know, what drives gold prices, and some fun other little facts and tidbits.

Drew Thomas:

Yeah, I mean, there's been definitely some gold in the news recently, whether you talk about the Olympics and everybody talking about gold medals or, like, go for the gold and all that stuff. And then obviously there's some stuff happening in the world politically that could possibly be talking about some of this stuff, right? So, you were doing some good research on gold, yeah.

Jeff Matevish:

So, yeah, we can start with some of your favorites, some statistics or some numbers. Yay, yay. So, yeah, gold, gold has, gold today, when we're recording this, is not at its all-time high, but it's up there, really. Yeah, gold at its all-time high, I think was at the end of last year, was at $5,608.35 an ounce. Wow. Today, it is $5,122.30 which is even a few dollars lower than what I found out when I did this research yesterday. So, so it's going down a little bit, but we're still pretty high comparative to the max, you know.

Drew Thomas:

So, how does that work? So, if I take my one-ounce gold ring into the local jewelers, yes, do they hand me five grand?

Jeff Matevish:

Well, so that's spot pricing. So, at $5,122.30 that, that is the going rate for one ounce. So, that's before fees, or whatever other money that whoever is selling you that piece of gold wants to tack on. But your base price is that spot.

Drew Thomas:

But that's, that's also, that's pure gold. Pure gold.

Jeff Matevish:

24 karat pure gold.

Drew Thomas:

So, so most of my, most of the jewelry and stuff you have in your house, even if it says 24 karat gold, is not really 100% through and through 24 karats. Yeah. I mean, it could be gold plated, yeah, yeah. Because otherwise, it's going to be so malleable that it would just, you could crush it in your fingers.

Jeff Matevish:

Yeah, it's an alloy, yeah.

Drew Thomas:

Yeah. So, so I think that, you know, if you have a one-ounce gold ring, don't expect to get five grand for it, though. What you're saying, okay, true, gotcha. But still, that's, that's not bad.

Jeff Matevish:

No, no. I mean that. I mean there's a pretty decent chunk of change. I don't know. I did not find the date, but the lowest price for gold was $34.83 an ounce. So, yeah, silver's even higher than that. So, wow. Yeah.

Drew Thomas:

Okay. So, so, why so high? I guess that's, you know, if it's, I mean, so, I'm, my guess is that $34 was probably back in the 1800s sometime, whenever.

Jeff Matevish:

Oh, I would assume, yeah, or something. But yeah.

Drew Thomas:

Even adjusted for inflation, I'm sure that it's not five grand.

Jeff Matevish:

Yeah. So, so gold, like, unlike other commodities, isn't 100% based on supply and demand. There are other factors into it, just what people put a value of gold on, you know? So, yeah, psychological effects during economic downturns. So, even when the economy is down, the prices of gold tend to keep going up.

Drew Thomas:

Mostly because we find value in it no matter what, is that with, yeah.

Jeff Matevish:

Essentially, yeah, yeah. As, as the...

Drew Thomas:

There's gold in them, they're hills. So, we're, we're just going to find it valuable no matter what the economy.

Jeff Matevish:

Right, as, as you know, people are always going to buy gold. So, as the, the buying power of the US dollar decreases, it's going to take more money to buy that same amount of gold, so the price of gold is going to go up.

Drew Thomas:

Kind of like Bitcoin. Like Bitcoin, yes, and it is no, gold is not like Bitcoin. I don't want to give that impression now, but yeah, yes.

Jeff Matevish:

But there is, there is a degree of supply and demand too. I mean, it's, it's not, you know, it's a finite resource, even though we have recently found a massive vein of gold, I guess.

Drew Thomas:

Yeah, that's pretty crazy. I read that headline too, in China, right?

Jeff Matevish:

Yeah, yeah, under another, under another vein of gold.

Drew Thomas:

Because, of course, you know, like, you know, just dig down deeper, right? Yes, but yeah, that's crazy. Now, you know, I guess it is supply and demand to a certain degree. But like you said, we're always going to find value in it. But at what point is there, does the value decrease because there's just so much of it that everybody can have some?

Jeff Matevish:

Well, yeah, I don't know. I mean, we use it in so many different things too. I mean.

Drew Thomas:

That's true. It's not just jewelry or gold bars. I mean, we use it in electronics and things like that. Yeah, it's like helium. I mean, helium prices are going through the roof because it's a finite resource, and people, companies use helium to create the clean rooms and everything that they used to make the electronics, so.

Jeff Matevish:

I remember years ago, whenever that you couldn't even get a helium balloon in a store, yeah, because they were, they were kind of.

Drew Thomas:

Yeah, and you can't, apparently, you can't artificially manufacture helium, either.

Jeff Matevish:

That's interesting.

Drew Thomas:

Which is it, or, I guess, I guess, if you can, it's so cost prohibitive that it's not worth it.

Jeff Matevish:

Oh yeah, yeah.

Drew Thomas:

That's what it is, yeah. But the same thing for gold. I mean, you know, medieval people were trying, forever, to try to find a chemical reaction that would turn lead into gold and work.

Jeff Matevish:

Yeah. Alchemy, exactly. Yeah.

Drew Thomas:

So, so how much is this thing worth, supposedly? Assuming that, assuming today's price.

Jeff Matevish:

$83 billion.

Drew Thomas:

$83 billion?

Jeff Matevish:

$83 billion. Wow, yes.

Drew Thomas:

The Chinese governments probably thrilled with the idea.

Jeff Matevish:

Yeah, hopefully they don't sell it all at one time, huh?

Drew Thomas:

Well, I guess, from what I was reading, though, China, despite how China is one of the world's largest gold producers, oh, and despite the fact that they are one of the largest gold producers, they still import more gold than they can mine.

Jeff Matevish:

Really? I guess they're probably huge, they're huge electronic manufacturers, so they're using it, you know, using it in more applications than what they can, they can mine.

Drew Thomas:

Yeah, but I guess this is probably going to put a little damper on that, so.

Jeff Matevish:

Well, or electronics will be a little cheaper. Yeah.

Drew Thomas:

Maybe. So, so what else so, so, so, what are we talking, so when it comes to gold, when people buy gold, like, if they buy, if I go on and I get, I don't know my investment portfolio, and I add gold to it, am I literally buying gold, or am I buying into the gold price?

Jeff Matevish:

you're buying an exchange traded fund. So, and that's, that could be a company that is investing in bullion, or it could be a company investing in the machinery that it takes to mine this gold. You know, anything that's gold related.

Drew Thomas:

The mining companies, yeah, yep, and things like that too. So, it's not literally just the gold, it's everything...

Jeff Matevish:

That has to do with mining.

Drew Thomas:

Yeah, it surrounds that gold industry then, right?

Jeff Matevish:

Yeah, mutual fund, I guess, type thing, yeah, yeah.

Drew Thomas:

So, yeah, so the so, I think that for the most part, though, very few people are buying gold bars. I mean, you see that stuff in movies where they break into a safe and there's gold bars everywhere. I don't know. Wasn't there, wasn't there something in the State of the Union just recently where they were talking about whether or not they should open up gold, open up Fort Knox and check to make sure the gold's all still there, some ridiculous thing. I mean, you know, but.

Jeff Matevish:

I've bought gold online before.

Drew Thomas:

Have you?

Jeff Matevish:

Yeah, one of these, these, I mean, there's like, big box, you know, you know, gold exchanges and stuff like that. So, yeah, I've bought, I've bought gold and silver, and I was an Iron Man fan. So, I bought palladium, just to say I had palladium little bits, you know.

Drew Thomas:

So, that goes into the thing, right? Yeah, yeah, the power source, yeah, right, yeah. I'm a little bit of an Iron Man person, but I'm not deep into it. I don't know all the, all the, yeah.

Jeff Matevish:

When I bought, when I bought palladium, it was around the same price as gold back then. So, okay, it was, it was pretty pricey. And I was, I was not buying ounces of gold. I was buying grams of gold and these little precious metals.

Drew Thomas:

Yeah, I guess people don't realize too, how much an ounce really is. I mean, an ounce is not very much when you're buying, say, a Hi-C drink or something like that. I remember whenever six ounces of like, Hi-C or something, fluid ounces too, yeah, but an ounce of gold is a lot more than what you typically think it is.

Jeff Matevish:

Yeah, because it's really dense. Yeah, my little grams are, like, if you took your pinky nail, that's about what a gram of, of gold is.

Drew Thomas:

And we're going to do conversion. How many grams, how many grams to an ounce?

Jeff Matevish:

Isn't it 16? I don't know. I don't know, actually, yeah, don't put that in, yeah, I don't know.

Drew Thomas:

Okay, so what? So, let's so, let's talk a little bit about jewelry and stuff, because I think that's where a lot of people really are when it comes to the gold, right?

Jeff Matevish:

Let's okay, a type of jewelry, so we just had the, the Winter Olympics. Ah, so the, the gold medals in the Winter Olympics are not actually gold, not fully gold anymore. Not full, not fully gold. So, they're no longer made of solid gold. The last pure solid gold medal was in a 1912 Summer Olympic Games in Stockholm, Sweden.

Drew Thomas:

So, we're talking 112 years ago.

Jeff Matevish:

Yeah, because so at the current price or yesterday's price, when, whenever I did this part of the research, okay, if you would melt down an Olympic gold medal now, it, it's about $2,500 value, okay, about $1,000,$1,011 in gold now, okay, so there is still a lot of value to an Olympic gold medal.

Drew Thomas:

But we're still talking a, what is that a fifth of an ounce then of gold? Yeah, yes, on these gold medals, then right? Because you're saying an ounce is five grand, right, right, yeah. So, that's, that's not much. So it's mostly silver, mostly silver, yeah. So, see, all the silver medalists can just sit there say, you know what?

Jeff Matevish:

We're almost the same. Yeah.

Drew Thomas:

You really won a silver medal as well. You just plated it in gold. But I really, I have mine is 92% of what I thought I earned. Yours is only 6%.

Jeff Matevish:

Yes, yeah, yes.

Drew Thomas:

What about bronze?

Jeff Matevish:

Oh, I don't know. I don't even know. I don't know what the going rate for bronze is.

Drew Thomas:

I don't know what the going rate is, but I will tell you, I did look it up. They do make bronze medals out of bronze.

Jeff Matevish:

Do they?

Drew Thomas:

It's mostly, it's mostly copper and tin, which is what bronze is, yeah. So, bronze medals are bronze medals. Silver medals are silver medals. Gold Medals are copycat silver medals.

Jeff Matevish:

Yeah, you know, it's kind of like the, you know, the penny. That's not actually copper. It's, zinc and copper type thing, you know, yeah, no longer exist anymore, so I don't know why I even brought that up.

Drew Thomas:

Well, that's all right, yeah, I bring up stuff that doesn't exist all the time. It doesn't matter. I also looked up too. I found that in the, in the Olympics that were held in Paris, the Summer Olympics, okay, held in Paris a couple years ago, they actually included a very small amount of iron in medals from the Eiffel Tower.

Jeff Matevish:

No way, yeah, I was going to say just to make it a little cheaper, but that's really cool.

Drew Thomas:

Yeah, it was iron flakes or something like that from the Eiffel Tower that they included in the metal when they made the, the Olympic medals. So, everybody that won a medal, M, E, D, A, L at the Paris Olympics has a tiny bit of the Eiffel Tower's iron in them.

Jeff Matevish:

That's really neat.

Drew Thomas:

Which I thought was kind of cool. Yeah, yeah.

Jeff Matevish:

Yeah. That is cool. Okay.

Drew Thomas:

So, what else can we, what else can we talk about when it comes to gold, because, what else did you find?

Jeff Matevish:

Well, like I said, we're coming up on St Patrick's Day, so yes, did you ever, do you know what the, the story of the leprechaun and his pot of gold actually was?

Drew Thomas:

I actually don't.

Jeff Matevish:

Okay, I didn't either.

Drew Thomas:

I ate lots of Lucky Charms whenever I was a kid. That's about the closest I can get, and they were indeed magically delicious. Yes, yes. But see now I'm going to, I'm going to sidetrack you here, though, because let's talk Lucky Charms.

Jeff Matevish:

I'm sure. Okay. Now, I'm not a serial guy. No, I probably don't know. Whatever you're going to say.

Drew Thomas:

Well, I was going to ask you, what were the, what were your marshmallows? Well because there's a gap, an age gap, between the two of us, and I think your marshmallows were different than my marshmallows.

Jeff Matevish:

So, I remember the rainbow. Yeah. I remember a pot of gold.

Drew Thomas:

Yeah, no, no, they're older. No, no, there was no pot of gold in mine or anything like that. Mine was, mine was red hearts, orange stars, yellow moons, green clovers. Okay, period.

Jeff Matevish:

Hearts, stars, horseshoes, clovers and blue moons, pots of gold and rainbows and the red balloons?

Drew Thomas:

Yeah, and see, you've got an entirely different list than, okay, I think, I think it's, I think maybe there were some stars or hearts in there that were the same, but I had those, those were my marshmallows, your marshmallows are different.

Jeff Matevish:

So, did you...

Drew Thomas:

And arguably better.

Jeff Matevish:

Did you, well, I don't know about that, but did you eat the marshmallows first or last, or did you eat it all together, like, you know?

Drew Thomas:

Um, yeah, that's a good question.

Jeff Matevish:

I wasn't a serial guy, but I would always save my marshmallows for last.

Drew Thomas:

Yeah, I think I probably did that whenever I was younger, for sure. I think as I got a little older and started to age out of things like Lucky Charms, I would sort of more of a mix, because I think that it was just a sugar sludge by the time that you were done, yeah, if you left the marshmallows for the end, yeah.

Jeff Matevish:

But I don't like soggy cereal, so I would, it was a twofold I would, yeah, get rid of the sog from the cereal first, and then I had the marshmallow treat at the very end.

Drew Thomas:

There you go. I know my wife's brother, he liked the, the marshmallows so well that a couple of years back, we found that they sold just the marshmallows in a bag, and she bought like, two or three bags of them for him for like, his birthday. He was in his glory, and he's in his 40s.

Jeff Matevish:

It brings you back to your childhood. Hey, yeah, if you want to be a kid for a little

Drew Thomas:

It did not matter, well you know what, there comes a point in your life, I will say, there comes a point in your life where, even if it's like kids' cereal or something like that, you just don't care anymore. If that's what you bit, yeah, that's how you do it. want, you just go buy it, and there's, there's no stigma, yeah, associated with it. If I'm 50 years old, and I want to eat Lucky Charms, that's what I'm going to do. Well, here's the other crazy thing. We were comparing stuff, what did we get? We got around Halloween, we got the monster cereals, okay, right? Like the Boo Berry and all that, yeah, Count Chocula and stuff. And we were, we were kind of laughing, because in our, in our cereal cupboard, we also had, I think it was Raisin Nut Bran or something like that, right? And we actually took the two boxes at one point, and we compared the ingredients, believe it or not, the Count Chocula was healthier for you than the Raisin Nut Bran was.

Jeff Matevish:

I believe it. Yeah, I can, I can't tell you so when, when my wife was pregnant, yeah, she had gestational diabetes, so we were watching everything sugar. We would spend, I don't know. I think one day we probably spent a half hour in the cereal aisle at like Walmart, just comparing cereals, and, oh, my god, she had, like, certain numbers that she couldn't go above for, you know, the different, yeah, you know, macros and stuff like that. And I don't think we walked out with a, with a box of cereal because she couldn't eat any of it.

Drew Thomas:

Yeah, it is a lot. Yeah, it is, but, but, anyway, so I digress, I took us off the path. Tell us about leprechauns.

Jeff Matevish:

Leprechaun. So, the original story for the leprechauns was, it was two poor farmers, a husband and wife farmer, and they were pulling their crops one day, and they pulled their last carrot, and when they pulled their carrot, out popped the leprechaun, okay, okay. And leprechauns...

Drew Thomas:

You know, like you do, like you do, you know.

Jeff Matevish:

And the leprechaun said, you know, if you if you let me go, you know, I'll grant you a wish. And they said, okay, we'll let you go. And they started wishing, but they didn't stop wishing. They wish for this and that, and this and that. And the leprechaun was getting frustrated, so he eventually said, okay, we're going to change this. I can give you everything that you want, or you can have everything you want if you find my pot of gold and it's at the end of the rainbow. So, the greedy farmers said, oh, that's a deal. They let the leprechaun go. The leprechaun went on his way, and the farmers chased after the end of the rainbow that they never could catch. So, you can never get the pot of gold at the end of the rainbow. Interesting. So, that the moral of the story was, you got to work for your money. You got to, you know, don't, don't just, it's not always easy. You can't just wish for things. They magically appear. Yeah, work for it.

Drew Thomas:

That's, that's a really fantastic story, especially, I thought you were going to tell me was some sort of a horrible little leprechaun, like the horror movies.

Jeff Matevish:

Yeah, those are my favorites, yeah.

Drew Thomas:

That's, that's a nasty leprechaun. Yeah, no, that's really, that's, it's got a Rumpelstiltskin vibe to it. Yeah, a story, I think, yeah.

Jeff Matevish:

I like the messaging or, I mean, yeah, the moral of the story type thing, you know, yeah.

Drew Thomas:

I completely agree. And I think that it's true. I mean, the world is full of people with quick fixes, you know, whether it's weight loss or earning money, or, you know, HGTV telling you that you can remodel your entire house in just two hour episodes.

Jeff Matevish:

With no budget, yeah.

Drew Thomas:

With, with the, you know, and people buy into that, because everybody wants that quick fix, yeah, you know. And the reality is that unfortunately or fortunately, however you want to look at there is very, almost never a quick fix to those things. So, you do have to work hard. You do have to, you know, be smart with your money. You do have to learn how to save before you spend all the things that we tend to preach on this show.

Jeff Matevish:

You know, especially if you're going to buy gold, you better start saving. Yeah, so we're getting pretty high.

Drew Thomas:

Yeah, that's, that, that is pretty cool. But okay, so, so I guess I'm not going to go home and dig through all of my old jewelry and stuff, any yeah, it's probably not really going to get me a whole lot.

Jeff Matevish:

No, but I don't like cereal, but I'm going to have some Lucky Charms I think, all right, Happy Saint Patrick's Day Drew.

Drew Thomas:

Thanks. You too.

Jeff Matevish:

This podcast focuses on having valuable conversations on various topics related to banking and financial health. The podcast is grounded in having open conversations with professionals and experts with the goal of helping to take some of the mystery out of financial and related topics, as learning about financial products and services can help you make more informed financial decisions, please keep in mind that the information contained within this podcast and any resources available for download from our website or other resources relating to Bank Chats is not intended and should not be understood or interpreted to be financial advice. The hosts, guests, and production staff of Bank Chats expressly recommend that you seek advice from a trusted financial professional before making financial decisions. The hosts of Bank Chats are not attorneys, accountants or financial advisors, and the program is simply intended as one source of information. The podcast is not a substitute for a financial professional who is aware of the facts and circumstances of your individual situation. Thank you for listening. Please check out our full library of episodes, which can be found on the ameriserv.com website. You can also download or stream the podcast from your favorite podcast app.

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