TheCityUK: Value of Gold, Silver Trading Turnover Hit Record Levels In 2010

TheCityUK: Value of Gold, Silver Trading Turnover Hit Record Levels In 2010

08 March 2011, 12:28 p.m.
By Allen Sykora

Global gold and silver trading posted record turnover in 2010 of $25.1 trillion and $3.2 trillion, respectively, said a report from Tuesday from TheCityUK.

Meanwhile, over-the-counter markets in London generated about two-thirds of the gold trading and around 40% of the silver trading, the organization said. TheCityUK is an independent membership body promoting the U.K. financial and related professional services industry.

The data on metals were included in a report detailing the amount of global trading for all commodities and the portion that occurs on London-based exchanges.

TheCityUK reported that the volume of global commodities contracts traded on exchanges increased by a fifth in 2010, and a half since 2008, to around 2.5 billion contracts.

Exchanges in China and India are gaining in importance.

“Commodities funds under management more than doubled to $380 billion between 2008 and 2010, largely due to a strong increase in investments in exchange-traded commodities products,” said Marko Maslakovic, senior manager for economic research at

TheCityUK. “The growing attraction of commodities as an asset class resulted in proliferation of investment options making it easier to access this market.”

Inflows into the commodities sector totaled $60 billion in 2010, the second-highest year ever, down from the record $72 billion allocated to commodities funds the previous year,

TheCityUK report said. The bulk of the funds went into the precious metals and energy products, the report said. The report said that the rise in prices of commodities themselves increased the value of the commodities funds under management.

TheCityUK said the value of gold traded globally rose by about a quarter in 2011, while silver trading increased by 57%, helped in large part by the safe-haven appeal of the metals due to economic uncertainty and the rise in prices.

Daily reported net trading in gold on the London Bullion Market Association averaged $22.5 billion in 2010, up 12% on the previous year, TheCityUK said. Daily trading in silver on the LBMA increased by a fifth to $1.8 billion.

Meanwhile, major exchanges in London accounted for around 15% of global exchange trading in commodities in 2010, said the organization. This included NYSE.Liffe for “soft” commodities, with 16.7 million contracts traded in 2010; the London Metal Exchange for non-ferrous metals, with a 90% market share and record turnover in 2010 of 120.3 million contracts; and ICE Futures Europe, with volume of 217.2 million contracts.