Commodities
Gold Market Liquidity at Record Highs Amid Underinvestment
The gold market is massive in terms of liquidity, with an average daily trading volume of $356 billion in July. In one particularly busy week earlier this year, over $1 trillion worth of gold changed hands on the London spot market.
Most Western investors opt for gold-backed ETFs, which are a convenient way to play the gold market. However, owning ETF shares is not equivalent to holding physical gold.
The gold market is significantly underinvested, with many investors still favoring other assets over gold. According to analysts, even a small increase in demand could drive prices substantially higher if this shift in investment strategy continues.