The London OTC market
The London OTC market has historically been the centre of the gold trade and today comprises approximately 70% of global notional trading volume per our estimates. The London market attracts participants from all around the world and sets the twice daily global reference benchmark for gold, the LBMA Gold Price. Uniquely the market in London trades 400 ounce bars ‘Good Delivery’ bars which are stored in the member vaults of the London Precious Metals Clearing Limited (LPMCL) and the Bank of England. London’s unique vaulting infrastructure with its strictly enforced chain of custody, as well as the sizeable stocks of gold that reside within it, contribute to London often being referred to as the ‘terminal market’. The London market also enjoys a time zone advantage, bridging Asian and US trading hours, and benefits from its status as a leading global financial services hub.
Notwithstanding the London market’s pre-eminence, it has been losing relative share of global trading volumes. In 2015 banks operating in the market stopped submitting forward offered rates (GOFO rates) which were used to establish the market’s forward curve, one of several symptoms of a market that has become increasingly fragmented. The World Gold Council’s initiative to partner with a consortium of leading financial players and the London Metal Exchange to introduce LMEprecious is a direct response to these pressures. This suite of exchange-traded contracts seeks to modernise and introduce efficiencies to the heart of the gold trading market.
The US futures market (COMEX)
Despite London’s leading role in the physical market, the COMEX derivatives exchange operated by CME Group has become an increasingly important venue in driving price discovery. Trading activity on COMEX is primarily concentrated on the ‘active month’ (nearest dated) contract which acts as a proxy for the spot price. Only a small number of contracts physically settle into delivery of bars into COMEX vaults but the market is nonetheless tightly linked to physical markets through a very active Exchange for Physical (EFP) market. Notably, a steadily increasing share of COMEX volume is transacted during Asian market hours reflecting the exchange’s success of tapping into Asian market growth.
The Chinese market (SGE & SHFE)
The largest purely physical spot exchange in the world is the Shanghai Gold Exchange. Established in 2002 under close oversight of the People’s Bank of China, SGE has enjoyed a rapid rise to prominence that has mirrored China’s growing importance in the gold market. In 2016 SGE introduced the Shanghai Gold Price benchmark to cement China’s role as a price-setter, to help the internationalisation of the RMB and to broaden international participation in the Chinese market. It should be noted that SGE’s spot and deferred contracts are complemented by very active futures trading on the Shanghai Futures Market (SHFE), although the two exchanges are not directly linked.
Secondary market centres
Other important markets include Dubai, India, Japan, Singapore and Hong Kong. There are exchanges in all these markets offering a range of spot trading facilities or listed contracts but these have not attracted the liquidity seen on the market’s primary venues. Nonetheless, these markets play an important role to varying degrees in serving local demand or acting as regional trading hubs. For example, Hong Kong has long acted as a gateway to the Chinese market and Singapore is establishing itself as an important focal point for trading in the ASEAN region.
FAQs
Estimated Market Cap: $15.681 T
The Market Capitalization of Gold is currently arround $15.681 T.
Who runs the World Gold Council? ›
World Gold Council
| Formation | 1987 |
|---|
| Region served | Worldwide |
| President | Kelvin Dushnisky |
| CEO | David Tait |
| Website | www.gold.org |
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The three most important gold trading centres are the London OTC market, the US futures market and the Shanghai Gold Exchange (SGE). These markets comprise more than 90% of global trading volumes and are complemented by smaller secondary market centres around the world (both OTC and exchange-traded).
How much is 1 ton of gold worth? ›
So, how much is one tonne of gold precious metal worth? A tonne, in 2022, would be priced at its highest over $65,000,000 and the lowest just under $52,000,000. To calculate how much one tonne of gold would be worth, you can multiply the kilo gold price by 1,000 for a rough figure.
Who currently owns the most gold? ›
The United States has the most gold reserves and has nearly as many reserves as the combined total of the next three countries with the largest gold holdings: Germany, Italy, and France.
Who is buying all the gold? ›
Central banks have been consistent net buyers of gold on an annual basis since 2010 - accumulating over 7,800 metric tons over that time, with more than a quarter of that purchased in the last two years, according to the World Gold Council.
Who controls the most gold in the world? ›
The United States holds the world's largest stockpile of gold reserves by a considerable margin of over 8,100 tons. The U.S. government has almost as many reserves as Germany, Italy, and France, which are the next three largest gold-holding countries combined.
How much is gold worth per gram? ›
Live Gold Spot Prices
| Gold Spot Prices | Today | Change |
|---|
| Gold Prices Per Ounce | $2,330.00 | -15.00 |
| Gold Prices Per Gram | $74.91 | -0.48 |
| Gold Prices Per Kilo | $74,909.50 | -482.25 |
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Can I Trade Gold with $10? While it's technically possible to trade gold with $10, it's not advisable. Such a small amount would severely limit your trading options and expose you to excessive risk. It's recommended to start with a more substantial capital to engage in gold trading effectively.
Who has the best gold prices online? ›
Summary of the Best Online Gold Dealers of 2024
- American Hartford Gold: Best Reputation.
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Which country sells the best gold? ›
Countries such as Switzerland, Australia, and Canada are known for producing high-purity gold, while countries such as China and Russia are the largest producers of gold in the world. When it comes to jewelry, the purity and color of gold used can vary depending on the desired durability and aesthetic.
Who is the best trader of gold? ›
Best Gold Trading Brokers – Comparison
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2 more rowsAccording to figures released by the World Gold Council, gold reserves above ground are around 210,000 tonnes, equal to more than 6,700,000,000 ounces. If we multiply this number by $2,300 (spot price of gold per ounce), we obtain a gold market cap above $15 trillion.
How big is the entire gold market? ›
We neither include gold in technological applications. Therefore, after these corrections, we can say that the gold market capitalization is about $2.5-3.0 trillion.
How much gold is traded in the world? ›
Leading major financial assets worldwide 2023, by average daily trading volume. This statistic shows the leading major financial assets worldwide between January and December 2023, by average daily trading volume. Gold had the second highest average daily trading volume at 162.2 billion U.S. dollars.
How much is the US gold reserve worth? ›
What Country Has the Most Gold? The country with the most gold is the United States, with 8,133 metric tons in the American gold reserve. This amounts to a value of $480.84 billion, going by the price of gold at the beginning of January 2023.
