Precious Metal Derivatives - Thailand

The nominal value in the Precious Metal Derivatives market is projected to reach US$63.91bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 5.71% resulting in a projected total amount of US$84.34bn by 2029.
The average price per contract in the Precious Metal Derivatives market amounts to US$0.01 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 12.31m 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 Thailand is experiencing a significant surge in interest and activity.

Customer preferences: Investors in Thailand are increasingly turning to Precious Metal Derivatives as a way to diversify their portfolios and hedge against market volatility. The allure of potentially high returns coupled with the security of investing in precious metals is attracting both retail and institutional investors.

Trends in the market: One noticeable trend in the Precious Metal Derivatives market in Thailand is the growing demand for gold derivatives. Gold has always been a popular choice for investors in the country due to its perceived stability and value retention, especially during times of economic uncertainty. As a result, the market is seeing an uptick in gold futures and options trading.

Local special circumstances: Thailand has a strong cultural affinity towards gold, with the metal holding significant traditional and religious value in the country. This cultural preference for gold as a symbol of prosperity and good fortune translates into a higher demand for gold derivatives in the financial markets. Additionally, the government's efforts to promote Thailand as a regional financial hub are also contributing to the growth of the Precious Metal Derivatives market.

Underlying macroeconomic factors: The economic landscape in Thailand, like many other countries, is facing challenges such as inflation and currency fluctuations. In such uncertain times, investors often seek out safe-haven assets like gold to protect their wealth. The growing interest in Precious Metal Derivatives can be attributed to this need for stability and security in investment portfolios. Furthermore, the overall growth of the Thai economy and the increasing sophistication of the financial markets are creating more opportunities for investors to access and trade in Precious Metal Derivatives.

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.