Precious Metals Market
Report ID: PMRREP4343
Report Type: Ongoing
Format: PPT*, PDF, EXCEL
Industry: Consumer Goods
The global precious metals market is projected to rise from US$313.5 Bn in 2024 to US$456 Bn by the end of 2031.The market is expected to secure a CAGR of 5.5% during the projection period from 2024 to 2031.
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Attributes |
Key Insights |
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Precious Metals Market Size (2024E) |
S$313.5 Bn |
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Projected Market Value (2031F) |
US$456 Bn |
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Global Market Growth Rate (CAGR 2024 to 2031) |
5.5% |
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Historical Market Growth Rate (CAGR 2019 to 2023) |
4.7% |
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Precious metals are naturally occurring rare metallic elements having significant economic value. They have high luster, usually ductile which tend to be less reactive than most elements. Precious metals are primarily regarded as investments and industrial commodities. Platinum group metals and gold are some of the most prominent precious metals present in the industry.
While the coinage metals, silver and gold are consumed in industrial applications, precious metals are better known for their use in jewellery and art. Other precious metals include the platinum group metals such as iridium, osmium, rhodium, ruthenium, palladium and platinum.
Increasing prices for coinage precious metals such as gold are anticipated to be one of the key factors driving the market as more and more consumers are purchasing gold as a mean of long terms investments. In addition, growing demand for palladium in catalytic converters in the automotive industry in vehicles exhausts are also expected to contribute towards the growth of the market.
Demand for precious metals from other sectors such as jewelry and industrial are also anticipated to drive the growth of the market. However, technical issues and diminishing ore grades of these metals are expected to hamper the growth of the market.
Key Trends Shaping the Market
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Get a Customized VersionEconomic Indicators Influence the Demand for Precious Metals
Economic indicators such as GDP growth, inflation rates, unemployment levels, and central bank policies significantly influence the demand for precious metals. Economic uncertainty, recessionary fears, or currency devaluation can prompt investors to seek safe-haven assets like gold and silver, driving up their prices.
Economic growth is often associated with increased demand for industrial commodities, including precious metals like silver, platinum, and palladium. As economies expand, there is greater demand for these metals in sectors such as electronics, automotive manufacturing, and renewable energy, which can drive up prices. Conversely, slowing economic growth or recessionary conditions may lead investors to seek safe-haven assets like gold to protect against downturns, increasing demand for the metal.
Precious metals are commonly used as hedges against inflation, as they tend to maintain their value over time. When inflation rates rise, the purchasing power of fiat currencies declines, prompting investors to allocate a portion of their portfolios to precious metals to preserve wealth. Consequently, higher inflation expectations often lead to increased demand for precious metals, particularly gold and silver, which are considered traditional inflation hedges.
Diverse Industrial Application of Precious Metals in Different Sectors
Precious metals have diverse industrial applications in sectors such as electronics, automotive manufacturing, aerospace, and healthcare. Changes in industrial demand due to technological advancements, shifts in consumer preferences, or regulatory changes can impact the overall demand and prices of precious metals.
Precious metals such as gold, silver, platinum, and palladium are essential components in electronic devices due to their superior conductivity, corrosion resistance, and reliability. They are used in connectors, circuit boards, contacts, and electrodes in smartphones, computers, tablets, televisions, and other consumer electronics.
Precious metals play critical roles in automotive manufacturing, particularly in catalytic converters for emission control systems. Platinum, palladium, and rhodium are catalysts used to reduce harmful emissions from vehicles, converting pollutants into less harmful substances.
Aerospace and aviation industries rely on precious metals for their unique properties and performance characteristics. Platinum, palladium, and gold are used in aircraft engines, turbine blades, sensors, and electrical components due to their high temperature resistance, corrosion resistance, and reliability.
Increasing Development of Substitute Materials
Advances in materials science and technology may lead to the development of substitute materials that can replace precious metals in certain applications. For example, innovations in semiconductor technology could reduce the demand for silver in electronics, while alternative catalysts may lessen the need for platinum and palladium in automotive catalytic converters.
Substitute materials can often serve similar functions to precious metals but at a lower cost or with different properties. As these substitutes become more available and technologically advanced, they can reduce the demand for precious metals in various industries such as electronics, automotive, and jewellery.
When substitute materials offer comparable functionality at a lower price, they create price competition for precious metals. This can lead to downward pressure on the prices of precious metals as consumers and industries opt for more cost-effective alternatives.
The development of substitute materials often involves significant innovation and research efforts. This focus on alternative materials can divert attention and resources away from the development and utilization of precious metals, limiting their market growth and innovation potential.
The Strength of Major Currencies
The strength of major currencies, particularly the US dollar, can influence the price of precious metals. A strong dollar typically makes precious metals expensive for buyers using other currencies, dampening demand, and prices.
Precious metals like gold and silver are often seen as alternative stores of value to fiat currencies. When major currencies strengthen relative to each other, the perceived need for safe-haven assets like gold diminishes. Investors may prefer to hold stronger currencies or assets denominated in those currencies, reducing demand for precious metals and putting downward pressure on their prices.
The strength of a country's currency relative to others affects the international competitiveness of its exports and imports. A stronger currency can make exports more expensive for foreign buyers, potentially reducing demand for goods produced in that country. This can impact the overall economic conditions and industrial demand for precious metals in manufacturing sectors.
The Global Transition Toward Green Economy
The global transition toward green economy, driven by concerns about climate change and environmental sustainability, presents opportunities for precious metals. These metals are essential in the production of clean energy technologies, energy-efficient appliances, and emission-reducing catalysts. As governments and industries prioritize sustainability, demand for precious metals in these applications is expected to grow.
Precious metals such as silver, platinum, palladium, and rare earth elements are essential components in various clean energy technologies. For example, silver is used in solar panels to conduct electricity efficiently, while platinum and palladium are critical in catalytic converters for reducing emissions in vehicles. As countries around the world invest in renewable energy sources like solar, wind, and hydrogen fuel cells, the demand for these precious metals increases significantly.
The shift toward electric vehicles as a means to reduce greenhouse gas emissions from transportation relies heavily on precious metals, particularly lithium, cobalt, nickel, and rare earth elements for batteries and electric motors. These metals are crucial for enhancing battery performance, energy storage capacity, and overall vehicle efficiency. As the adoption of electric vehicles accelerates globally, the demand for these precious metals is expected to rise substantially.
Inflation Hedge
Precious metals have traditionally served as a hedge against inflation. With economic uncertainties and central banks injecting liquidity into the market, investors often turn to gold, silver, and other metals to protect their wealth. During times of rising inflation, investors seek assets that can maintain their real value.
Precious metals tend to attract increased demand as investors look for safe-haven assets to protect their purchasing power. This heightened demand can drive up the prices of precious metals, creating opportunities for market players, including miners, refiners, traders, and investors, to profit from price appreciation.
In response to heightened demand for inflation hedges, financial institutions and investment firms often introduce new investment products tied to precious metals, such as gold-backed exchange-traded funds (ETFs), futures contracts, and structured products. These investment vehicles allow investors to gain exposure to precious metals without physically owning them, expanding the market, and providing opportunities for financial intermediaries and product developers.
Rising Demand for Safe-Haven Assets
Economic uncertainties, geopolitical tensions, and volatile financial markets often lead investors to seek refuge in safe-haven assets like gold and silver. Future opportunities in the precious metals market may arise from increased demand for these metals as a hedge against inflation, currency devaluation, or geopolitical risks.
Precious metals have long been recognized as stores of value throughout history. Unlike fiat currencies, which are susceptible to inflation and devaluation over time, gold and silver maintain their purchasing power and intrinsic worth over the long term. Investors view precious metals as a reliable store of value, making them desirable assets for wealth preservation purposes, especially during periods of economic instability or currency depreciation.
Gold Category Registers a Significant Market Share
Gold is widely regarded as a reliable store of value and a hedge against inflation and currency devaluation. During times of economic uncertainty or financial instability, investors often turn to gold as a safe-haven asset to preserve wealth and mitigate risk. Its intrinsic value and limited supply contribute to its enduring appeal as a store of wealth.
Gold's liquidity, divisibility, and universal acceptance make it an attractive investment asset for individuals, institutions, and central banks. Investors purchase gold through various vehicles, including physical bullion, exchange-traded funds (ETFs), futures contracts, and gold-backed securities.
The liquidity and depth of the gold market contribute to its dominance within the precious metals segment. Emerging economies in Asia Pacific including India and China, are the leading consumers of gold owing to the increasing spending capacity of the individuals.
Asia Pacific Market to Grow Substantially
Asia Pacific serves as the major producer as well as consumer of gold with significant consumption in Southeast Asian countries such as China, and India. Moreover, high growth in these emerging economies coupled rising disposable incomes of the individuals is the major driver for the precious metals market.
Future market growth is expected to be from Asia Pacific with the growing industrial activities in emerging economies such as India, and China. These factors are expected to provide new opportunities for the growth of the precious metals market.
Countries in the Asia Pacific region, particularly China and India, have a long-standing cultural affinity for gold and other precious metals. These metals hold significant cultural, religious, and social value in these societies, driving substantial demand for jewelry, investment, and industrial purposes.
Competition among mining companies for resource exploration, extraction efficiency, cost management, and environmental sustainability is a significant aspect of the precious metals market. Companies compete to discover and develop new deposits, optimize production processes, and maintain favorable cost structures to maximize profitability.
Innovations in mining technologies, refining processes, and industrial applications of precious metals can influence competitiveness within the market. Companies investing in research and development to improve efficiency, reduce environmental impact, and enhance product quality gain a competitive edge.
Top Industry Players Profiled in the Global Market for Precious Metals
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Attributes |
Details |
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Forecast Period |
2024 to 2031 |
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Historical Data Available for |
2019 to 2023 |
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Market Analysis |
US$ Billion for Value |
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Key Regions Covered |
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Key Market Segments Covered |
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Key Companies Profiled |
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Report Coverage |
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Customization & Pricing |
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The global precious metals market is projected to rise from US$313.5 Bn in 2024 to US$456 Bn by the end of 2031.
Diverse industrial application of precious metals in different sectors is a key driver for market growth.
The global transition toward green economy presents opportunity for the market players.
Gold segment is leading the precious metals market.
A few of the leading manufacturers operating in the market are Barrick Gold, First Quantum Minerals, and Goldcorp Freeport McMoRan Copper & Gold Inc.
