Global Gold, Silver Trading at Record Levels in 2008

Global gold and silver trading has posted record activity since the start of the credit crisis, according to the Bullion Markets 2009 report published in London on Monday by the International Financial Services London (IFSL).

Gold turnover increased 58 percent in 2008 to a record 20.2 trillion U.S. dollars. Silver trading increased 39 percent during the year to a record 2.6 trillion dollars.

The traditional "safe-haven" appeal of precious metals has attracted many investors to this asset and the growth in turnover was partly due to an increase in prices of precious metals during the year with gold posting an all time high in March of 1,011 dollars per ounce, said Marko Maslakovic, author of the report and a senior economist of IFSL.

According to the report, OTC (over the counter) market accounted for nearly three-quarters of gold trading and 56 percent of silver trading. Most of this activity was transacted through the LBMA (London Bullion Market Association). Daily reported net trading in gold on the LBMA averaged 20 billion U.S. dollars in the first 11 months of 2008, up 45 percent on the same period of 2007. Daily trading in silver on the LBMA increased 32 percent to 2 billion dollars.

Futures and options trading of gold on exchanges increased more than 80 percent in 2008 to a record 5.1 trillion dollars, said the report. Trading of silver increased 60 percent to a record 1.2 trillion dollars. Exchange traded gold and silver funds have been the strongest source of growth in demand since their introduction in 2003. Comex in New York, MCX in India and Tocom in Tokyo account for most of the exchange traded activity.