The Bank of Japan Institute for Monetary and Economic Studies paper points to a developed lease market, storage costs lower than those of crude oil or copper, and physical metal that does not easily deteriorate as reasons for the financial-asset character1.

Uses differ by metal. Jewelry accounts for 45% of world gold consumption and central banks and other institutions for 21% (2024 estimate, excluding ETFs and similar investments)2. Autocatalysts account for more than 40% of world platinum demand and more than 84% of palladium demand (2016)3. Because precious metals also have industrial uses, their prices respond both to financial-asset factors and to industrial demand.

Notes

  1. Bank of Japan Institute for Monetary and Economic Studies, "コモディティ価格変動の特徴とプライシング・モデルの展開" (Characteristics of Commodity Price Movements and Developments in Pricing Models, in Japanese), Monetary and Economic Studies, April 2010, section 2(1), Table 1 (p. 29), and note 53 to section (4) "Precious metals" (p. 66). ↩

  2. U.S. Geological Survey, "Mineral Commodity Summaries 2025", Gold, opening paragraph of page 2. ↩

  3. London Bullion Market Association, "A Guide to the Loco London Precious Metals Market", "19. Key Facts about Precious Metals", the Platinum and Palladium entries. ↩