According to a recent market study published by Growth Market Reports titled, “Global Gold Bullion Market by The global gold bullion market was valued at USD 37,448.8 Mn in 2019 and is projected to reach USD 115,175.8 Mn by 2027, expanding at a CAGR of 12.1% during the forecast period. The market is primarily driven by growing consumption of gold in jewelry.
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.
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.
