The U.S. Mint is missing one gold bar.
No. This isn’t the plot of a National Treasure sequel. It’s the latest addition to the St. Louis Fed’s Economy Museum: a 9.75” long, 1.5” tall bar of gold on loan from the Mint. Because the bar is 99.999% pure gold, it weighs 28 pounds! So, how much does a 28-pound gold bar cost?
Let’s use FRED data to figure out the price of this bar, which is on display, coincidentally, right across from the museum’s FRED exhibit.
Although some people see gold as a hedge against inflation, the graph above shows just how volatile the price of gold can be. Here, we have the “fixing price” of a troy ounce of gold in U.S. dollars in the London bullion market. London is the largest trading center for precious metals, and gold prices are reported daily at two different times (10:30 AM and 3:00 PM London time) to account for these intra-day variations.
Sorry, but now we have to do some math. There are 14.5833 troy ounces in a pound, and the museum’s gold bar weighs 28 pounds. That’s 408.3324 troy ounces. Much like gold, FRED is very malleable; so we can customize the data to reveal the price of the entire bar. In the graph below, we’ve applied the formula a * 408.3324. Clearly, changes in global supply and demand affect the price. And, between January 1 and February 10, 2020, the price of the bar has ranged from $623,564.41 to $646,880.19.
If you visit the Economy Museum, you’ll have the chance to try to lift this bar yourself. Before you visit, though, you may want to eat your spinach: 28 pounds is no small weight. Speaking of, the bar is literally worth its weight in gold, but what about its weight in cash? At its highest, the price of the gold bar would be a little more than 14 pounds of (mostly) $100 bills. If, you’re interested, the formula $646,880.19 / $100 * 1 gram/bill * 0.00220462 pound/gram gets you there.
By the way, FRED fans: The Economy Museum also sells FRED t-shirts! Unfortunately, we have no price or weight data for those…
How these graphs were created: For the first graph, search for “gold price” and select the 3:00 PM fixing price in U.S. dollars. From the “Edit Graph” panel, use the “Add Line” tab to search for and add the 10:30 AM fixing price. For the second graph, start with the 3:00 PM graph. From the “Edit Graph” panel, apply the formula from the post. Use the “Format” tab to add the golden touches.