Precious Metal Derivatives - Kyrgyzstan

The nominal value in the Precious Metal Derivatives market is projected to reach US$232.70m in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 4.15% resulting in a projected total amount of US$285.20m by 2029.
The average price per contract in the Precious Metal Derivatives market amounts to US$0.02 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 10.52k 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

Over the past few years, the Precious Metal Derivatives market in Kyrgyzstan has shown interesting developments.

Customer preferences: Investors in Kyrgyzstan have shown a growing interest in diversifying their investment portfolios, seeking alternative assets to protect against market volatility. Precious Metal Derivatives offer a way to hedge against inflation and geopolitical uncertainties, attracting both institutional and retail investors looking for stability and potential returns.

Trends in the market: One noticeable trend in the Kyrgyzstani market is the increasing participation of retail investors in Precious Metal Derivatives trading. This trend is driven by the ease of access to online trading platforms and the availability of educational resources on derivatives trading. Additionally, the growing popularity of mobile trading apps has made it more convenient for retail investors to engage in derivative trading.

Local special circumstances: Kyrgyzstan's geopolitical location and economic ties play a significant role in shaping the Precious Metal Derivatives market. As a landlocked country with a developing economy, Kyrgyzstan is susceptible to external market forces and geopolitical risks. This makes Precious Metal Derivatives an attractive option for investors seeking to hedge against such risks and uncertainties.

Underlying macroeconomic factors: The macroeconomic environment in Kyrgyzstan, characterized by currency fluctuations and inflationary pressures, has led investors to seek out alternative investment opportunities. Precious Metal Derivatives provide a way to mitigate the impact of these economic challenges and offer a potential store of value in times of economic uncertainty. Additionally, the government's efforts to improve regulatory frameworks and investor protection have helped to boost confidence in the derivatives market.

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.