Gold derivatives are financial instruments whose prices are derived from physical gold. A gold derivative is a contract between a buyer and a seller that wants exposure to the physical gold price. They have many useful applications for those involved in the physical bullion business such as price discovery and price risk management. Furthermore, given recent spikes in gold price volatility caused by increased central bank interventions and heightened geopolitical risks, the gold derivatives and futures have become increasingly important. This is a scenario that will be hugely witnessed in the coming days, as more and more investments are taking place in gold derivatives and futures. Therefore, the increased demand for gold derivatives and futures is expected to boost the growth of the gold derivatives & futures market in the upcoming period.
The global gold derivatives & futures market is segmented on the basis of end-user, distribution channel, enterprise size and region. Based on end-user, the market is divided into gold futures, spot gold over-the-counter (otc) contracts, spot low leveraged gold contracts and gold options. In terms of distribution channel, the market is categorized into individual and enterprises. On the basis of enterprise size, the market is divided into online commodity trading and others. Geographically, the market is analyzed across several regions such as North America, Europe, Asia-Pacific, and Latin America, Middle East & Africa (LAMEA).
Key players operating in the global gold derivatives & futures industry include CME Group Inc., Newmont Corporation, Barrick Gold Corporation, FRANCO-NEVADA, PJSC Polyus, Agnico Eagle Mines Limited, Gold Fields Limited, Kinross Gold Corporation, AnglogoldAshanti and Yamana Gold. These companies have adopted several strategies such as product launches, partnerships, collaborations, mergers & acquisitions, and joint ventures to strengthen their foothold in the global gold derivatives & futures market.
COVID-19 Scenario Analysis
- In the wake of COVID-19 situation, the first quarter of 2020 has been exceptionally difficult for the gold derivatives and futures market. When markets recovered, however, those losses were more than offset with significantly better performance. Despite facing losses during the first quarter, gold derivatives and futures have managed to return a fair percentage of the combined three-quarter performance on an average.
- Investors redeemed more than planned in 2020 due to COVID-19, as the pandemic made cash a premium for a variety of investor types, including hospitals and healthcare systems. At the same time, the pandemic disrupted investors' allocation process. Attributed to the difficulty in conducting operational due diligence under quarantine and social distancing, many investors opted to stick with existing gold derivatives and futures relationships last year rather than establish new ones. It can be derived that though the COVID-19 has hit the markets and disrupted the investor’s allocation process, the investors have adapted to it over time.
Top Impacting Factors
An increase in investments of gold derivatives due to its diversification and rise in demand of gold derivatives as it provides security against inflation are driving the growth of the market. In addition, higher growth opportunities of gold derivatives and futures further propel the growth of the market. However, a highly volatile market is expected to hamper the growth. Contrarily, hedging against future risks is further anticipated to provide several growth opportunities for the key players in the gold derivatives and futures market in the upcoming years.
Increase in Investments of Gold Derivatives Due to its Diversification
When a customer wants to diversify their investments, they invest in a variety of industries that will respond to market changes in different ways. It will help a customer to maintain a consistent annual profit while also helping them in avoiding large losses. Furthermore, investing in commodities can help the customers to manage risks in the stock market if they are looking to hedge against their stock and bond investments. Therefore, the increase in investments in gold derivatives is further expected to drive the growth of the gold derivatives & futures market during the forecast period.
Rise in Demand of Gold Derivatives as it Provides Security Against Inflation
Regular trading is harmed by inflation. Inflation reduces the value of the stock and bond investments, whereas commodities are usually profitable during times of inflation. Because as the price of goods and services rises, the value of the commodities that are required to produce those goods and services also rises. Furthermore, a customer can profit from the market upswings by keeping some commodities in their investment portfolio. Therefore, the rise in demand for gold derivatives as it provides security against inflation is expected to drive the growth of the gold derivatives and futures market during the forecasted period.
Key Benefits of the Report
- This study presents an analytical depiction of the global gold derivatives & futures market forecast along with the current trends and future estimations to determine the imminent investment pockets.
- The report presents information related to key drivers, restraints, and opportunities along with a detailed analysis of the market share.
- The current market is quantitatively analyzed to highlight the global gold derivatives & futures market growth scenario.
- Porter’s five forces analysis illustrates the potency of buyers & suppliers in the gold derivatives & futures market trends.
- The report provides a detailed gold derivatives & futures market analysis depending on the present and future competitive intensity of the market.
Questions Answered in the Gold Derivatives & Futures Market Research Report
- Which are the leading players active in the global gold derivatives & futures market size?
- What would be the detailed impact of COVID-19 on the global gold derivatives & futures market?
- What are current trends that would influence the market in the next few years?
- What are the driving factors, restraints, and opportunities of the global gold derivatives & futures market share?
- What are the projections for the future that would help in taking further strategic steps?
Gold Derivatives & Futures Market Report Highlights
| Aspects | Details |
 By Type |
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 By Distribution Channel |
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 By End-User |
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 By Region |
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 Key Market Players | Kinross Gold Corporation, PJSC Polyus, Newmont Corporation, Barrick Gold Corporation, Yamana Gold, CME Group Inc., AnglogoldAshanti, Gold Fields Limited, FRANCO-NEVADA, Agnico Eagle Mines Limited |
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