Gold Bullion Market Outlook
The global gold bullion market size was valued at USD 52.69 Billion in 2022 and is likely reach to USD 147.29 Billion by 2031, expanding at a CAGR of 12.1% during the forecast period, 2023-2031. The market is driven by increasing adoption of gold as a long-term investment and growing consumption of gold in jewelry.
Conversely, volatile prices, in the short run, and fluctuating supply of mined gold due to COVID-19 pandemic are restraining the market. Central banks focused on buying bullion from local producers and rising number of partnerships and acquisitions are creating opportunities in the market.
Gold Bullion Market Dynamics
Procurement of gold bullion is anticipated to rise among retail consumers, due to their focus on gold as a long-term investment. Retail consumers consider gold bullion as a safe mode of investment. Demand for gold bullion is growing at a substantial rate. Consumers invest in gold bullion to diversify their portfolio. It is a vehicle to alleviate losses in periods of market stress.
Gold bullion provides competitive returns in comparison with other investment options and acts as a hedge against currency risk and inflation. This rising demand from retail consumers is anticipated to positively affect the gold bullion market, thus propelling the market. Perception of gold jewelry as a status symbol is increasing and the adoption of gold jewelry among men is increasing at a rapid pace.
Bridal jewelry is a part of auspicious and grand functions like weddings. Use of necklaces and gold chains is common for routine use. Both women and men wear gold rings, anklets, and chains as a fashion statement.
Earrings & bracelets are used as gift items in several events such as anniversaries. Gold bullion is often melted and further processed to make jewelry, which in turn, is estimated to drive the market.
Gold is easily molded and drawn into wires. It is a great conductor of electricity, is beaten into thin sheets, and melted to form alloys with other metals. Solid state electronics use low currents and voltages, which are disrupted by corrosion at contact points.
Gold is an efficient conductor, which carries low currents and is unaffected by corrosion. Electronic modules made with gold are reliable. Gold is used in switch and relay contacts, connectors, and soldered joints.
A tiny quantity of gold is employed in each sophisticated electronic device, which includes mobile phones, calculators, television sets, and global positioning system (GPS) units. Consumption of these electronics is rising rapidly and the demand for gold is increasing correspondingly.
Gold bullion is melted and further shaped to be utilized in electronics applications. This in turn is anticipated to boost the gold bullion market.
Gold nanoparticles are used in millions of Rapid Diagnostic Tests (RDTs) conducted globally each year. This transformed the field of disease diagnosis over the last decade. Gold-based medicines are created and used to cure diseases such as rheumatoid arthritis.
A method to deliver anti-cancer drugs is developed to directly target tumors via gold nanoparticles. Rising RDTs are anticipated to positively affect the usage of gold in healthcare.
Gold is used in dentistry for dental bridges. Gold bullion is melted and further molded to be employed in RDT kits. This, in turn, is expected to drive the gold bullion market. Gold bullion is often perceived as a safe haven investment and a good vehicle to store wealth; however, it is a commodity extracted from ores and is subject to economic forces of supply and demand.
When gold miners manufacture surplus of gold in contrast to the market demand, the gold bullion prices experience a downward trend as per the laws of economics. Speculators that amass or sell off gold in large quantities stir ripples of brief imbalances in the market, which leads to extremely rapid price changes.
Gold Bullion Market Segmental Outlook
On the basis of product types, the market is segmented into gold bars and gold bullion coins. The gold bars segment accounted for a market share of 72.6% in 2020. The growth of the segment is attributed to increasing preference for gold bars by investors due to low average premium. A gold bar is a gold ingot made of highly refined metallic gold that consists a high level of purity.
Gold bars are classified as cast or minted depending upon the process of manufacture. Cast bars are cast into iron molds, once they cool down, and marked with the refiner's seal, its purity, weight, and unique serial number. The gold bullion coins segment is anticipated to expand at a CAGR of 18.4% during the forecast period, owing to its easy liquidation at the time of selling.
Bullion coins are usually minted in weight denominations, which are fractions of one troy ounce. Gold bullion coins acted as a primary mode of currency in the past centuries; however, the arrival of the international fiat currency system changed the role of gold bullion coins to an investment asset and collectible article. Small investors often purchase gold bullion coins as a bulwark against inflation.
In terms of distribution channels, the gold bullion market is bifurcated into offline and online. In terms of revenue, the offline segment accounted for a market share of 80.5% in 2020. Offline distribution channel involves local gold bullion dealers and shops. These shops allow buyers to assess the gold bullions prior to purchase.
Offline stores eliminate the costs of shipping and allows buyers to immediately access gold bullion rather than waiting for the bullions to arrive via post. Offline stores often charge a high premium in contrast to online purchases. These high premiums are charged to help the sellers cover their overhead expenses.
The growth of the segment is attributed to the buyers’ ability to physically see the gold bullion prior to its purchase. The online segment is anticipated to grow owing to the flexibility and convenience offered by online portals to the consumers. Online distribution channel refers to sale of products using an online portal such as company websites or web shops.
Online sale of products increases customer reach. E-commerce platforms are gaining acceptance as distribution channels, owing to the rising number of tech-savvy consumers and growing preference for online portals. Moreover, sellers sell across states, towns, and borders, eliminating all geographical limitations. Certified gold bullion dealers provide insured delivery as per live spot-based pricing.
Gold Bullion Market Regional Outlook
Based on regions, the global Gold Bullion market is divided into North America, Europe, Latin America, and Middle East & Africa. Asia Pacific constituted significant share of the global market in 2019 and is projected to expand at a substantial CAGR during the forecast period.
Countries such as India and China are the powerhouses of gold consumption in the region. Gifting bullion during key events such as weddings is typical in India and many other Asian cultures. This is likely to drive the market in the region.
Key Benefits for Industry Participants & Stakeholders
- In-Depth Analysis of the Global Gold Bullion Market
- Historical, Current and Projected Market Size in Terms of Value and Volume
- Potential & Niche Segments and Regions Exhibiting Promising Growth Covered
- Industry Drivers, Restraints and Opportunities Covered in the Study
- Recent Industry Trends and Developments
- Competitive Landscape & Strategies of Key Players
- Neutral Perspective on From Global Gold Bullion Market Performance
- Gold Bars
- Gold Bullion Coins
- North America
- Asia Pacific
- Latin America
- Middle East & Africa (MEA)
- GV Gold (Vysochaishy, PJSC)
- Heraeus Holding GmbH
- Mitsubishi Materials Corporation
- METALOR Technologies SA
- PAMP S.A.
- PJSC MMC Norilsk Nickel
- PJSC Polyus
- Polymetal International plc
- Royal Canadian Mint
- Valcambi sa
- Key players in the Gold Bullion market are PJSC Polyus, Mitsubishi Materials Corporation, Heraeus Holding GmbH, Polymetal International plc, and Royal Canadian Mint.
- These companies are considered as key market players of Global Gold Bullion market, based on their revenue, research & development (R&D) activities in the areas of improving offerings, and regional presence.
- The players are adopting key strategies such as product development, geographical expansion, mergers and acquisition and many other strategies to cater the increasing demand for Gold Bullion.