Precious Metal Derivatives - Malta

The nominal value in the Precious Metal Derivatives market is projected to reach US$2.03bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 4.89% resulting in a projected total amount of US$2.58bn by 2029.
The average price per contract in the Precious Metal Derivatives market amounts to US$0.33 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 6.60k 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 Malta is experiencing a notable shift in recent times.

Customer preferences: Investors in Malta are increasingly turning to Precious Metal Derivatives as a way to diversify their portfolios and hedge against market volatility. The appeal lies in the opportunity to gain exposure to the price movements of precious metals without the need to own physical assets.

Trends in the market: One key trend in the Maltese market is the growing interest in gold derivatives, driven by global economic uncertainties and geopolitical tensions. Investors are seeking safe-haven assets, and gold derivatives provide a convenient way to participate in the precious metal market. Additionally, there is a rising demand for silver derivatives, as industrial usage of silver remains strong, especially in sectors like electronics and renewable energy.

Local special circumstances: Malta's strategic location as a financial hub in the Mediterranean region has contributed to the development of its Precious Metal Derivatives market. The country's stable regulatory environment and well-established financial infrastructure attract investors looking to access the derivatives market. Moreover, the presence of experienced financial institutions and skilled professionals further supports the growth of the market.

Underlying macroeconomic factors: The evolving global economic landscape, marked by trade tensions and economic uncertainties, plays a significant role in shaping the Precious Metal Derivatives market in Malta. As investors seek alternative investment options to navigate market risks, the demand for precious metal derivatives is expected to continue growing. Additionally, fluctuations in interest rates and currency values impact investor sentiment towards derivatives linked to precious metals, influencing market dynamics in Malta.

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.