The recent gold price falls followed by record physical gold buying, concentrated in China and India, have shone a light on the paper and physical gold markets. A range of opinions exist on the workings of these markets, but where is the gold price really set?
The Real Asset Company's latest unique look at the paper and physical gold markets throws up some essential reading when it comes to understanding gold price discovery and investing in gold bullion.
Key takeaways from this include:
- Gold futures markets are worth $75 billion, with the Chicago Mercantile Exchange accounting for 85% of this
- Only 5% of COMEX open interest is backed by bullion in depositories
- The four most popular gold-backed ETFs are worth over $59 billion
- The gold ETF, GLD, accounts for nearly 60% of the ETF market
- The ten 10 largest gold refineries have annual capacity of 5,000 tonnes
- Valcambi, the largest refinery, has capacity of 1,400 tonnes worth a potential $63bn
Head of Research, Jan Skoyles , comments: "With recent tremors in the gold market, the increasingly obvious disparity between physical and paper gold, and recent rapid draining of COMEX inventories, where gold price discovery really happens is increasingly in the spotlight."
Based in London, UK, The Real Asset Company offers choice for investors and improved access to the bullion markets, proving an open market place for individuals to buy gold online. Using LBMA approved vaults in London, Geneva and Singapore, The Real Asset Company's platform was designed to help smaller investors buy gold bullion with the same security and efficiencies available in the wholesalemarkets, all from one simple account.