Analysis of the global precious metals market
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Objectives:
The analysis of the global precious metals market is aimed at finding up-to-date information and analyzing the market volume, consumers and competitors in the market under study, the changes that occurred in 2017-2019, as well as the forecast and trends in the industry in the long term for the period up to 2024.
Content
Part 1. Overview of the global precious metals market
1.1. Main characteristics of the market
1.2. Dynamics of the volume of the precious metals market in 2016-2020 Potential market capacity
1.3. Assessment of factors affecting the market
1.4. Life cycle stage of the precious metals market
1.5. Competition from substitute products
Part 2. Competitive analysis in the precious metals market
2.1. Major players in the market
2.2. Market shares of the largest competitors
2.3. Profiles of major players
Part 3. Forecast for the development of the precious metals market until 2025
Part 4. Findings from the study
Research excerpt
About the precious metals market
Precious metals are natural elements that are distinguished by their bright brilliance. These metals are rare, hard, less reactive and have a high economic value compared to base metals. They are also ductile, malleable, resistant to corrosion, and conduct heat and energy well. As a result, they find applications in jewelry, consumer electronics, automobiles, chemicals, and medical equipment around the world. Precious metals such as gold, silver, platinum and palladium are also used as valuable assets for investment purposes.
Reserves of gold, silver, platinum
Let's take a look at the state of stocks in the major precious metals market. So, despite the strong decline in world gold reserves in 2019, where the indicators reached a minimum for the study period from 2016 to 2020 at 50 thousand tons of gold. In 2020, the level of world gold reserves began to recover and showed an increase of 6%, reaching 53 thousand tons, which is already much closer to the indicators of 2017-2018.
In comparison, the silver market, on the contrary, reduced world reserves in kind. So, in 2020, the total world stock amounted to 500 thousand tons, which is 10% less than the values of the previous year.
Diagram. World gold reserves in 2016-2020, thousand tons
Source: World Gold Council
The world reserves of platinum for the last few years have been at the same level of 69 thousand tons. Most of these reserves, more precisely 91 percent or 63 thousand tons, are in South Africa. In second place is India with an indicator of 3,9 thousand tons or 6% of the total reserves of this category of precious metals.
Diagram. World platinum reserves in 2020, %
The current state of the market in the world
Based on the statistics of world reserves and other indicators on the gold market, we can conclude that gold had one of the lowest drawdowns in relation to the overall economic situation.
By the beginning of August 2020, the price of LBMA PM gold reached an all-time high of $2 per ounce. Record figures were also achieved in other currency equivalents. During the rest of the year, the price of gold fell slightly, but remained at a consistently high and comfortable level above $067 an ounce, reaching $1800 by the end of the year, up 1887,6% from 2019.
Diagram. Dynamics of world gold prices in 2016-2020, USD
Source: World Gold Council
Looking at the pricing situation in the silver market, since 2018, prices per ounce of silver have shown a steady increase. So in 2021 the price was 25,48 USD
ounce, showing a positive increase of 23,2% compared to 2020.
Diagram. Dynamics of world prices for silver in 2016-2020, USD
Source: Macrotrends LLC
What determines the price of the drug. Metals
The main factors that determine the price of precious metals are:
• The relationship of supply and demand. Metal prices are primarily dependent on supply and demand and can be extremely volatile at times. The supply of precious metals is limited, while demand is generally constant, although it can often rise sharply.
• World macroeconomic trends. Gold and silver are often considered safe investments as they hold their value and purchasing power better than other assets in times of volatility and economic uncertainty. During economic or political crises, prices for precious metals tend to rise. On the other hand, a strong and healthy global economy is trending towards lower gold and silver prices; demand is falling as investors look for riskier and more profitable companies.
• Inflation, monetary policy, exchange rates. Inflation rates play an important role in many countries' monetary policy decisions, as most central banks consider price stability to be their primary goal. Therefore, any change in inflation rates could affect the decisions of central banks, which in turn would affect the value of their currencies. Of course, the most important currency when it comes to precious metals is the US dollar because it is the world's reserve currency.
Market prospects
The precious metals market is experiencing growth due to changing lifestyles and increasing disposable incomes of the population. In addition, due to growing concerns about the environment, leading market players in various industries are investing in the processing of precious metals, which can later be used to produce pacemakers and artificial cochlea. What's more, governments around the world are imposing strict emission regulations, which in turn boosts the market as these metals are used to purify car exhaust gases. However, due to the rising number of coronavirus (COVID-19) cases, governments around the world have announced total lockdowns as a preventive measure to combat the pandemic. This disrupted supply chains and brought several production units to a halt, which in turn led to stock shortages. On the other hand, investment in precious metals has increased as a means to survive in rapidly changing market conditions.
For a more detailed overview of the dynamics of the market volume, analysis of demand, investments in the precious metals market, we suggest ordering a full-fledged market research.
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