Precious Metal Derivatives - Montenegro

The nominal value in the Precious Metal Derivatives market is projected to reach US$583.00m in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 5.24% resulting in a projected total amount of US$752.70m by 2029.
The average price per contract in the Precious Metal Derivatives market amounts to US$0.07 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 9.13k 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

In Montenegro, the Precious Metal Derivatives market is experiencing a notable shift in recent times.

Customer preferences: Investors in Montenegro are increasingly turning to Precious Metal Derivatives as a way to diversify their portfolios and hedge against market volatility. They are attracted to the potential for high returns and the opportunity to speculate on price movements without owning the physical assets.

Trends in the market: One prominent trend in the Montenegrin Precious Metal Derivatives market is the growing interest in gold and silver contracts. Investors view these metals as safe-haven assets during times of economic uncertainty, driving up the demand for derivatives linked to their prices. Additionally, there is a rising demand for innovative derivative products that offer exposure to multiple precious metals in a single trade.

Local special circumstances: Montenegro's small but growing economy is attracting foreign investors looking for new opportunities. The relatively stable political environment and strategic location in Southeast Europe make it an appealing market for Precious Metal Derivatives trading. Furthermore, the country's status as a candidate for European Union membership adds to its investment appeal.

Underlying macroeconomic factors: The global economic landscape plays a significant role in shaping the Precious Metal Derivatives market in Montenegro. Factors such as interest rates, inflation, and geopolitical events impact the prices of precious metals, influencing derivative trading activities in the country. Additionally, Montenegro's currency exchange rates and trade relationships with neighboring countries can also affect the performance of 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.