Structural & market trends

The global gold market is large and highly liquid. The World Gold Council estimated in 2025 that physical gold holdings by investors and central banks were worth approximately US$5.1 trillion, with a further US$1 trillion added through derivatives traded on exchanges or the over-the-counter (OTC) market. The gold market is also more liquid than several major financial markets, with liquidity volumes similar to those of US Treasury Bills, averaging over US$200 billion liquidity volumes per day in 2024.

Gold benefits from diverse sources of demand: as an investment, a reserve asset, a luxury good and a technology component. As an investment, gold acts as a store of value and is traditionally a preferred asset during times of uncertainty, while also serving as an inflation hedge for investors. It is often correlated with the stock market during risk-on periods but becomes inversely correlated during periods of uncertainty.

A growing de-dollarisation trend is driving increased gold buying from Central Banks as they reduce their exposure to US Treasuries due to factors such as rising geopolitical tensions. Global uncertainty and geopolitical instability have materially increased in recent years, while inflation is expected to persist amid ongoing geo-political tensions.

The World Gold Council estimates that annual consumption has reached record levels of approximately 4,900 tonnes in 2025, fuelled by demand from consumers, investors, central banks and industrial users. Around three-quarters of that demand is satisfied by newly mined gold, yet supply increases by little more than 1.5 per cent. annually, providing a favourable long-term backdrop for the market.

Gold mining underpins the supply of gold with around 75 per cent. of demand sourced from mine supply. The market has experienced prolonged underinvestment in greenfield exploration, resulting in a lack of major new gold discoveries. Major gold mining companies have consequently limited organic growth opportunities, and the time required to develop a mine from initial discovery to active production is long-dated, averaging between 15 and 20 years. The lack of organic growth opportunities has driven the recent surge in M&A activity in the market, which is expected to continue in the current gold environment. However, elevated gold prices have expanded minable reserves of previously non-economic resources, extending the lives of existing assets. The gold spot price reached a record high of over US$5,500 per oz in late January 2026, and since that date has continued to trade above US$4,000 per oz.