Precious Metal Derivatives - Spain

The nominal value in the Precious Metal Derivatives market is projected to reach US$183.30bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 3.60% resulting in a projected total amount of US$218.80bn by 2029.
The average price per contract in the Precious Metal Derivatives market amounts to US$0.09 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 2.04m 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 Spain has shown a significant increase in activity and interest in recent years.

Customer preferences: Investors in Spain have shown a growing interest in diversifying their portfolios by including Precious Metal Derivatives. This is driven by the desire to hedge against inflation and economic uncertainties, as well as to take advantage of potential price appreciation in the precious metals market.

Trends in the market: One of the notable trends in the Precious Metal Derivatives market in Spain is the increasing adoption of online trading platforms. This trend has made it easier for retail investors to access and trade these derivatives, thus contributing to the overall growth of the market. Additionally, there has been a rise in demand for innovative derivative products that offer exposure to a basket of precious metals, catering to investors looking for diversified investment options.

Local special circumstances: Spain's rich history in precious metal mining and jewelry making has contributed to a cultural affinity towards gold and silver. This cultural connection to precious metals has translated into a strong interest in Precious Metal Derivatives among Spanish investors. Furthermore, the presence of established financial institutions and a well-developed regulatory framework has provided a conducive environment for the growth of the derivatives market in the country.

Underlying macroeconomic factors: The economic stability and growth in Spain have played a crucial role in driving the demand for Precious Metal Derivatives. In times of economic uncertainty, investors often turn to safe-haven assets like gold and silver, leading to increased trading activity in precious metal derivatives. Additionally, the low-interest-rate environment in Spain has made alternative investments like precious metal derivatives more attractive to investors seeking higher returns.

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.