Size of the Gold Market

How big is the gold market? It should be easy to answer this question, right? After all, the gold market is a market for gold. And we know that gold inventory, understood as the total above-ground stock of physical gold is estimated to be around 190,000 tons. That’s about 6.1 billion ounces. At today’s dollar price (a little above $1,200 per ounce, as of November 11, 2018), that comes to about $7.3 trillion, a pretty large number.

However, we are interested in gold as part of the financial market, i.e. private investment and official gold reserves. Hence, although jewelry – which makes up almost 50 percent of that total gold stock – also serves as a store of wealth in many cultures, we subtract it from our calculations. We neither include gold in technological applications. Therefore, after these corrections, we can say that the gold market capitalization is about $2.5-3.0 trillion. It’s an enormous number, which surpasses the size of all European sovereign debt markets.

But we can also interpret and measure the size of the gold market in terms of its liquidity. As one can see in the chart below, the average daily trading volume for gold ranks among the largest financial assets in the world. In 2017, it was almost $200 billion per day in over-the-counter transactions (e.g., in London market), futures, and ETFs. Hence, gold is heavily traded, much more than many sovereign debt markets. Only Japanese Government Bonds and U.S. Treasuries are more liquid.

Chart 1: Average annual trading volume in certain financial markets, in $ (source:

Average annual trading volumes in certain financial markets in $

To sum up, the gold market is enormous, which makes it one of the largest and most important financial markets in the world today. Given its size and liquidity, gold is clearly a monetary asset and an attractive alternate currency. The huge trading volume also explains why annual mining production (and its cost) is an irrelevant factor in gold’s price formation (its equivalent changes hands in the global gold market during one trading day).