Precious Metal Derivatives - Nepal

Nepal

The nominal value in the Precious Metal Derivatives market is projected to reach US$4.34bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 4.97% resulting in a projected total amount of US$5.53bn by 2029.
The average price per contract in the Precious Metal Derivatives market amounts to US$0.63 in 2024.
From a global comparison perspective it is shown that the highest nominal value is reached in the United States (US$11,920.00bn in 2024).
In the Precious Metal Derivatives market, the number of contracts is expected to amount to 7.95k by 2029.

Market

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Analyst Opinion

The Precious Metal Derivatives market in Nepal has been experiencing a notable growth in recent years. Customer preferences in Nepal are shifting towards alternative investment options like Precious Metal Derivatives due to their potential for high returns and portfolio diversification.

Investors are increasingly looking for ways to hedge against inflation and geopolitical uncertainties, driving the demand for these financial instruments. Trends in the market indicate a growing interest from both retail and institutional investors in Precious Metal Derivatives in Nepal. The market is witnessing an influx of new participants as awareness about the benefits of these derivatives spreads.

Additionally, the development of online trading platforms has made it easier for investors to access and trade these instruments. Local special circumstances, such as the limited availability of traditional investment avenues and the cultural affinity towards gold and other precious metals, play a significant role in driving the growth of the Precious Metal Derivatives market in Nepal. The country's rich history of gold and silver craftsmanship also contributes to the appeal of investing in derivatives linked to these metals.

Underlying macroeconomic factors, including the stability of the Nepalese economy and the government's efforts to promote capital market growth, are creating a conducive environment for the expansion of the Precious Metal Derivatives market. As the financial sector continues to evolve and regulatory frameworks become more robust, investors are gaining confidence in participating in derivative markets.

Methodology

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.