As the international gold price continues to reach new highs approaching $2700, the precious metal market is also setting a new "milestone": the total market value of global physical gold has exceeded the $20 trillion mark for the first time!
Jeroen Blokland, founder of Blokland Intelligent Multi Asset Fund, was the first to notice this phenomenon in the entire financial market.
Blokland tweeted on Wednesday, "The real-time market value of gold has surpassed $20 trillion for the first time!" accompanied by a chart of gold market value changes produced by the institution.
Blokland has been closely monitoring every move in the precious metal market for many years. He pointed out several times earlier this year that some common websites in the current market are lagging behind in their statistics on changes in gold market value.
For example, in the well-known market value statistics website Company Smart Cap, the latest statistics on gold market value still remain at $18.019 trillion, but Blokland has repeatedly pointed out that the relevant figures are too low because the above ground gold stock data used by Company Smart Cap is still the old data from the World Gold Council three years ago (2021).
So, how is it calculated that the current market value of gold has exceeded the $20 trillion mark?
The answer is actually quite simple. According to the latest data released by the World Gold Council in February this year, as of the end of 2023, the global mined gold stock was 212582 tons. Converted to ounces (1 ton=35273.96 ounces) and multiplied by the current gold price (which reached a high of $2670 on Wednesday), this figure has already exceeded $20 trillion.
Undoubtedly, for the precious metal market, this number is clearly a milestone worth celebrating.
What is the purchasing power of $20 trillion in gold? If compared to the stock market, the world's gold can almost buy up the top ten listed companies in the world - equivalent to the total market value of Apple, Microsoft, Nvidia, Amazon, Google, Saudi Aramco, Meta, Berkshire Hathaway, TSMC, and Eli Lilly.
From the changes in market value over the years, the past four years have undoubtedly been the four years of soaring gold market value.
Before the outbreak of the pandemic in 2020, the total market value of gold had not actually exceeded $10 trillion. However, in recent years, this ancient and eternal asset has written a new miracle of price surge.
Despite the tightening cycles of global central banks in the past few years, which logically did not benefit gold as an interest free asset, gold has not stopped rising. The strong central bank purchases and increasingly tense geopolitical situation have continuously driven the demand for safe haven and diversified allocation of gold, thereby also supporting the gold price.
As the Federal Reserve and other central banks around the world have recently entered a new easing cycle, the price of gold has undoubtedly been further boosted. Since the beginning of this year, the price of gold has risen by nearly 30%, the largest year-on-year increase in the past 30 years.
UBS analysts stated in a report last month that "despite hitting multiple new highs this year and outperforming major stock indices, we believe there is still room for gold prices to rise in the next 6 to 12 months. We believe key factors include the recovery of large-scale inflows of exchange traded fund (ETF) funds, which has been lacking since April 2022
Many analysts have stated that the inflow of funds into gold listed exchange traded funds (ETFs) in the coming months, especially from Western investors, is expected to increase, which could add more positive stimulus to the already record high gold price.
Many Wall Street institutions have also raised their gold price targets to the $3000 mark.
Michael Widmer, a commodity strategist at Bank of America, wrote in a recent report to clients that factors such as increased investment demand, geopolitical tensions, interest rate cuts, and central bank purchases of gold could all boost gold prices. Bank of America expects gold prices to reach $3000 per ounce in the next 12 to 18 months.