Gold remains a $31 trillion market, still under allocated in investor portfolios: Report

Gold continues to hold a unique position in global financial markets, combining scale, liquidity, and long-term strategic value, according to a recent market primer by the World Gold Council (WGC). Despite being a $31 trillion asset class, the report highlights that gold remains under-owned, suggesting potential opportunities for investors looking to strengthen portfolio resilience.

Globally, around 220,000 tonnes of gold exist above ground, accumulated over centuries. This large but limited supply supports gold’s intrinsic value, while its durability ensures that almost all of it remains in circulation. Unlike commodities that are consumed, gold’s existing stock acts as a buffer, making the market deep and relatively stable.

Investable gold market

The investable gold market is estimated at roughly $15 trillion, largely concentrated in physical forms such as bars, coins, and exchange-traded funds (ETFs). Nearly $9 trillion is held by private investors, while central banks and official institutions account for around $5 trillion. A further $1.5 trillion sits in derivatives, which play a supporting role by improving liquidity and aiding price discovery in global markets.

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Liquidity is one of gold’s strongest advantages. The metal recorded average daily trading volumes of about $361 billion in 2025, making it as liquid as major financial assets like US Treasuries. London remains the dominant over-the-counter trading hub, while exchanges such as COMEX and the Shanghai Futures Exchange contribute significantly to global price discovery. This depth ensures investors can enter or exit positions efficiently, even during periods of market stress.

Despite its size and accessibility, gold accounts for only about 3% of global financial assets. This relatively low allocation suggests that many portfolios are underexposed to gold, especially given its historical role as a hedge against inflation, currency depreciation, and geopolitical uncertainty. Even small increases in allocation can have a meaningful impact due to gold’s scale and liquidity.

Central banks

Central banks continue to play a key role in supporting demand. Official institutions collectively hold nearly 39,000 tonnes of gold, valued at around $5 trillion, representing about 26% of global reserves. Developed economies typically maintain higher allocations, averaging around 30%, while emerging markets are steadily increasing their holdings from lower levels. This trend reflects a broader effort to diversify reserves away from traditional currencies and enhance financial stability.

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On the supply side, gold benefits from a well-balanced structure. Around 74% of supply comes from mining, while 26% is sourced from recycling. This combination helps stabilise the market, as recycled gold can quickly respond to rising demand or higher prices, reducing the risk of supply shocks.

Demand for gold

Demand for gold is equally diversified. It serves multiple roles — as an investment asset, a store of value for central banks, a consumer product in jewellery, and a component in technology. This broad demand base helps gold perform across economic cycles. During periods of growth, consumer demand—especially jewellery—supports prices. In contrast, during economic uncertainty or financial stress, investment demand typically rises, reinforcing gold’s safe-haven appeal.

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This “dual nature” makes gold distinct from most other assets. It does not rely on a single driver of demand, allowing it to remain relevant across different market conditions. For investors, this translates into diversification benefits and improved risk-adjusted returns over the long term.

Overall, the WGC report underscores gold’s continued importance in modern portfolios. Its combination of scale, strong liquidity, diversified demand, and relatively low allocation makes it a compelling asset for investors seeking stability, flexibility, and protection in an increasingly uncertain global environment.