A large yet scarce market
The gold market has two attractive features for investors. Gold’s scarcity supports its long-term appeal. But gold’s market size is large enough to make it relevant for a wide variety of institutional investors – including central banks.
Mine production has added approximately 3,300t per year over the past decade, equivalent to an annual 1.8% increment of above-ground stocks.2 Mine production is also well diversified across regions (Chart 17).
The approximate breakdown of above-ground stocks of physical gold,3 based on its use, is:
- Jewellery: 93,253t (USD 5.7tn) 46%
- Official sector: 34,211t (USD 2.1tn) 17%
- Bars and Coins: 40,621t (USD 2.5tn) 20%
- ETFs and similar: 3,764t (USD 0.2tn) 2%
- Other and unaccounted: 29,448t (USD 1.8tn) 15%
The financial gold market is made up of bars, coins, gold-backed ETFs and central bank reserves. This segment of the gold market compares favourably to the size of major financial markets (Chart 16).