Precious Metal Derivatives - Sri Lanka

Sri Lanka

The nominal value in the Precious Metal Derivatives market is projected to reach US$9.80bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 8.73% resulting in a projected total amount of US$14.89bn by 2029.
The average price per contract in the Precious Metal Derivatives market amounts to US$0.15 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 77.13k by 2029.

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Analyst Opinion

The Precious Metal Derivatives market in Sri Lanka is experiencing a notable shift in dynamics, reflecting evolving customer preferences and local special circumstances.

Customer preferences: Investors in Sri Lanka are increasingly turning to Precious Metal Derivatives as a way to diversify their investment portfolios and hedge against market volatility. The allure of potentially high returns coupled with the opportunity to trade in a regulated environment is driving more interest in these financial instruments.

Trends in the market: One prominent trend in the Precious Metal Derivatives market in Sri Lanka is the growing popularity of gold derivatives. As a traditional store of value, gold holds a significant cultural and financial significance in the country. This trend is further fueled by the global uncertainty and economic fluctuations, prompting investors to seek safe-haven assets like gold derivatives.

Local special circumstances: Sri Lanka's strategic geographical location and historical ties to the precious metal trade play a role in shaping the Precious Metal Derivatives market. The country's proximity to major gold trading hubs and its established financial infrastructure contribute to the ease of trading these derivatives. Additionally, the cultural affinity towards gold as a symbol of wealth and prosperity further boosts the demand for gold derivatives in the local market.

Underlying macroeconomic factors: The macroeconomic landscape in Sri Lanka, marked by fluctuating exchange rates and inflationary pressures, influences the demand for Precious Metal Derivatives. Investors often turn to these derivatives as a way to safeguard their wealth against currency devaluation and rising prices. Moreover, the government's policies on imports and exports of precious metals also impact the availability and pricing of these derivatives in the market.

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.