Precious Metal Derivatives - Estonia

The nominal value in the Precious Metal Derivatives market is projected to reach US$4.28bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 5.16% resulting in a projected total amount of US$5.51bn by 2029.
The average price per contract in the Precious Metal Derivatives market amounts to US$0.20 in 2024.
From a global comparison perspective it is shown that the highest nominal value is reached United States (US$11.92tn in 2024).
In the Precious Metal Derivatives market, the number of contracts is expected to amount to 25.93k by 2029.

Definition:

The Precious Metal Derivatives market refers to derivatives of precious metals such as gold or silver. These include financial vehicles such as options and futures. Derivatives allow investors to profit from a commodity’s value development without owning the physical commodity (e.g. instead of owning a unit of gold, an investor could own a derivative of gold). Therefore, physical commodities are out of scope in this analysis.

Structure:

The market contains the following KPIs: annual notional value, the number of traded contracts, the open interest (number of outstanding contracts at the end of a year), the average notional value per contract as well as the price data of popular specific derivatives of this category.

Additional information:

Examples of popular precious metal derivatives are gold, silver, or platinum.

Precious Metal Derivatives, e.g. Gold, Silver, Platinum

Physical precious metal commodities

The Precious Metal Derivatives market in Estonia is experiencing a shift in customer preferences towards more diverse investment options in the financial sector.

Customer preferences: Investors in Estonia are increasingly looking for alternative investment opportunities beyond traditional asset classes. This shift is driven by a growing appetite for higher returns and portfolio diversification. Precious Metal Derivatives offer a unique way for investors to hedge against market volatility and inflation, making them an attractive option in the current economic climate.

Trends in the market: One notable trend in the Estonian Precious Metal Derivatives market is the increasing demand for customized derivative products tailored to specific investor needs. This trend reflects a growing sophistication among market participants and a desire for more personalized investment solutions. Additionally, there is a rising interest in environmentally sustainable derivatives, aligning with global trends towards responsible investing.

Local special circumstances: Estonia's position as a digital leader in Europe has facilitated the growth of online trading platforms, making it easier for investors to access Precious Metal Derivatives. The country's tech-savvy population and supportive regulatory environment have created a conducive ecosystem for the development of the derivatives market. Moreover, Estonia's strategic location as a gateway between East and West positions it as an attractive hub for financial services, further boosting the demand for Precious Metal Derivatives.

Underlying macroeconomic factors: Estonia's stable economic growth and low inflation environment provide a favorable backdrop for the expansion of the Precious Metal Derivatives market. The country's commitment to sound fiscal policies and regulatory stability instills confidence in investors, driving interest in derivative products. Additionally, Estonia's integration into the European Union has opened up opportunities for cross-border investment and collaboration, contributing to the overall growth of the derivatives market in the country.

Data coverage:

Figures are based on commodity derivatives, their notional value, the number of contracts traded, the open interest (outstanding contracts at the end of a year), and the average value of a contract.

Modeling approach / Market size:

Market sizes are determined by a Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use market research & analysis, and data of World Bank, as well as the World Federation of Exchanges. Furthermore, we use relevant key market indicators and data from country-specific associations and national data bureaus such as GDP, wealth per capita, and the online banking penetration rate. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. In this market, we use the HOLT-damped Trend method to forecast future development. The main drivers are GDP per capita an the online banking penetration rate.

Additional Notes:

The market is updated twice per year in case market dynamics change.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

Precious metals have long been seen as a hedge against inflation and economic uncertainty. When stock markets are volatile or currencies devalue, investors flock to precious metals like gold and silver as a store of value, driving their prices up. Gold, in particular, stands out as the most popular choice for protecting wealth in times of uncertainty, with central banks around the world holding vast reserves to safeguard against currency fluctuations and political upheaval. Also, the demand for gold as an investment outweighs its demand for industrial uses - more so if we also consider owning jewelry as a form of investment. This pattern contrasts sharply to other precious metals. Silver, for instance, has a much stronger industrial demand, due to its use in sectors like electronics, solar panels, and medical equipment. Platinum follows a similar pattern, with industrial demand outpacing investment demand, due to the its many different end uses.