At the outset of each recent Olympic Games-and especially during the long bull market for gold-it's become customary to check the precious metals market pricing chart and do the math on the number of grams of gold, silver and bronze in each winner's medal. But if you want to know what an Olympic medal is really worth, don't use a scale.
To Olympic memorabilia market experts, such as Ingrid O'Neil, a California-based auctioneer who specializes in such memorabilia, metal is the furthest thing from their mind when thinking about how to value a precious winner's medal.
"A tiny amount of the real value is the gold," O'Neil said. Olympic medal voyeurs also should stop thinking about the Olympic medal as being the only item with value from the games, she said.
"Even nowadays, people who hear about participation medals or torches or winners medals being available can't believe it," she said. "I recently sold a Squaw Valley 1960 Winter Olympics torch for about $280,000."
(Read more: An Olympic amateur making millions )
"You have to stop thinking of relating metallic value to value of the medal," said Jim Greensfelder, a one-time Proctor & Gamble executive, software entrepreneur and former elected city government official who wrote "the bible" on the history of the modern Olympic Games medals.
The real way to appraise an Olympic medal can be summed up with a classic economic concept: supply and demand. "It matters how many there are and how many people are willing to let them go," Greensfelder said.
Take the 1904 St. Louis gold, which is still not known to be in any individual's collection, according to Greensfelder. It was one of the only Olympics to feature solid gold medals-when the Olympics returned from an eight-year hiatus in 1920, the European economies were so decimated the era of "true" Olympic gold ended.
"I recently had at auction the report for the 1920 games and I read it," O'Neil said. "It was so austere. They had no money. ... People had to donate stuff to the Olympics and pay for items ... they didn't have enough for this or that."
But most importantly, the 1904 St. Louis Olympics featured the fewest number of athletes: It's scarcity value that makes this medal the most valuable of all, Greensfelder said. (Among medals without a particular Olympic personality attached to them: e.g., Jesse Owens, "Miracle on Ice" U.S. hockey team star Mike Eruzione.)
Bill Mallon, an orthopedic surgeon and former professional golfer who is also one of the world's foremost Olympic historians, pointed out that the first Winter Games in 1924 had only 17 events. This year in Sochi there are 98. The 1896 Summer Games had 43 events. There were 302 events in the London Games of 2012.
The collector's cheat sheet
It's easy enough to look past the precious metals chart and get a sense for how to value an Olympic medal as collectible, in addition to the scarcity value.
(Read more: Socio-economic data claims the gold )
No. 1: What condition is it in? An Olympic medal that has been worn or that an athlete let their kids play with, "We call that a burial piece," Greensfelder said.
No. 2: Does it come in the original presentation and with all the original components? This is a fact that is lost on most people, Greensfelder said: Medals only started being awarded with the ribbon around the neck in 1960, but that adds value, as does the decorative box or wrapping that each medal, both winner and participation versions, come in. "It's like a Matchbox Car," Greensfelder said. "In the box versus out of it makes a difference; the box can be as valuable as the medal ... Lilehammer was a mark of excellence in presentation."
The pawn shop
Still, the exponential growth in the number of Olympic events through the modern era hasn't resulted in a glut in recent years. Fewer medals make it to market now than in previous Olympics.
When O'Neil first started to see Olympic medals showing up at coin shows, she didn't know it at the time but it was a byproduct of Soviet bloc economic desperation. "They wanted to go home with U.S. dollars," O'Neil said.
At Lake Placid, Lithuanian bobsledders brought pillowcases with stuff to sell for cash, and it was the same in Calgary, Greensfelder remembered. "If you could get around the Russian handlers, they wanted to sell stuff."
"That's all changed," O'Neil said. "There are no medals coming out of Eastern European countries anymore."
Now, "It's tip money for them," Mallon said.
For the countries still not well off, they also tend to lack athletes winning medals. In the last 10 years, most winners' medals that have gone into collections were from Cuba. "$5,000 in Cuba means a wealthy person," O'Neil said.
About a decade ago, the sea change in availability of medals dawned on Greensfelder in Norway: Russians were there with tons of money buying, not selling. Today, there are a significant number of deep-pocketed Olympic memorabilia collectors in Russia.
It's considered an exception if a medal from recent games comes to market, and if any new winners medals come up, the values are going up, she said.
"It's almost always in the families, and it only gets out of the families when people need the money," Mallon said. Greensfelder, who serves as a medal authentication expert for auctions-including verifying that the Jesse Owens 1936 gold which sold for the highest price ever actually came from the 1936 games-said, "In bankruptcy cases, I hear from their attorneys."
And then there are the items that even Olympic collectible experts dream about, but doubt they will ever see: the winners medals from the first U.S Olympic men's basketball Dream Team, or the torch Muhammad Ali used to light the Atlanta Summer Games flame.
The closest O'Neill came? "Ali signed some of the Atlanta Olympic relay torches and those sell for $5,000 to $10,000. He can't sign anything anymore and since he lit the cauldron in Atlanta, people pay special attention."
Olympic torches follow the classic law of supply and demand. There were 16,000 torches in Atlanta. And a total of 14,000 torches were made for Sochi. For the Helsinki 1952 Summer Olympics, by comparison, there were a few dozen torches in the relay, according to O'Neil, who sold one for about $742,000 two years ago.
"There are quite a number of torch collectors, but the Sochi torch is not something to invest in, for sure. You will always find a Sochi torch in the future."
Keeping the flame alive
Greensfelder estimates that there are fewer than 100 people in the world who collect winners' medals. "Like other collectible hobbies, these are rare items people pay big money for. And the value won't disappear. If you buy a medal for $10,000, it won't be worth $5,000 next year, but if you buy one for $100,000, it could be worth $150,000 next year," he added.
"Ninety-nine percent are true collectors. They have a passion for the games," O'Neil said. "There might be 1 percent who invest in it. New collectors are coming in. I have collectors on every continent, some in China and some in South America and in Africa. We safeguard the history," she said. The International Olympic Committee now holds a collectors fair every year.
Greensfelder has as close to a complete collection of Olympic participation medals as anyone in the world. But he won't for much longer-Greensfelder's collection of participation medals dating back to the first modern Olympics, the Athens Games of 1896, is currently for sale in a private transaction valued at roughly $300,000.
"I thought I might have a sentimental attachment, but I haven't been able to keep them at home on display," Greensfelder said. "Now I have to keep them locked up in the bank, afraid someone will come and steal them. ... The only time I get to enjoy it is when I go look at them while doing some research on medals," said the longtime fixture on the Olympics scene know as "The Medal Man."
As for the impending sale, Greensfelder added: "I have three grandkids ready to go to college and I'm very happy about that. It's been the opposite of what I thought I might feel. And I have other things in my collection ... I collect Olympic beer steins. I have 500," Greensfelder said.
-By Eric Rosenbaum, CNBC.com.
More From CNBC