Precious Metal Derivatives - Mexico

The nominal value in the Precious Metal Derivatives market is projected to reach US$262.60bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 3.64% resulting in a projected total amount of US$314.00bn by 2029.
The average price per contract in the Precious Metal Derivatives market amounts to US$0.13 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 2.66m 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 Mexico is experiencing a notable shift in recent years.

Customer preferences: Investors in Mexico are increasingly turning to Precious Metal Derivatives as a way to diversify their investment portfolios and hedge against economic uncertainties. The allure of potentially high returns and the ability to trade these financial instruments easily are driving factors behind this growing interest.

Trends in the market: One noticeable trend in the Mexican Precious Metal Derivatives market is the rising demand for silver derivatives, reflecting Mexico's status as one of the world's largest silver producers. This trend is further fueled by the country's strong industrial demand for silver, creating a unique dynamic in the market compared to other regions. Additionally, there is a growing trend towards more sophisticated derivative products, as investors seek tailored solutions to meet their specific risk management needs.

Local special circumstances: Mexico's proximity to the United States, one of the largest financial markets in the world, plays a significant role in shaping the Precious Metal Derivatives market in the country. The close economic ties between the two countries create opportunities for Mexican investors to access a wide range of derivative products and benefit from the expertise of global financial institutions operating in the region. Furthermore, the presence of a well-established mining industry in Mexico contributes to the deep liquidity and diverse range of precious metal derivatives available in the market.

Underlying macroeconomic factors: The macroeconomic landscape in Mexico, including factors such as inflation rates, interest rates, and foreign exchange fluctuations, influences the demand for Precious Metal Derivatives. Economic stability and government policies play a crucial role in shaping investor sentiment and risk appetite, impacting the overall growth and development of the derivatives market. Additionally, global economic trends and geopolitical events can also have a significant impact on the Mexican Precious Metal Derivatives market, leading to fluctuations in trading volumes and derivative prices.

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.