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How is the market cap of a commodity calculated?

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  • Welcome Alex F., I hope you enjoy PF&M stack. Where have you seen market cap in relation to commodities? I've never heard of the concept being applied to them because it isn't a natural measure.
    – MD-Tech
    Commented Feb 25, 2021 at 11:01
  • Hi, thanks for the warm welcome. I've seen it applied to currencies or gold, which AFAIK is also a commodity. Please correct me if I am wrong. How would one calculate the Market Cap of gold or currencies?
    – Alex F.
    Commented Feb 25, 2021 at 12:11
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    You'll have to tell us what you mean by "market cap". For companies it's the value of each share times the number of shares in the public market. There is no finite volume of commodities in the open market, so this definition does not apply.
    – D Stanley
    Commented Feb 25, 2021 at 13:45
  • DStanley thanks for your reply. I've seen the term Market Cap applied to gold and cryptocurrencies. Why is that so?
    – Alex F.
    Commented Feb 25, 2021 at 15:06
  • @AlexF. ah so you mean currency gold rather than commodity gold! There is a relatively fixed (or knowable) quantity of that so you can just do price * estimated total quantity but I don't know if it is meaningful. When you say commodities we usually think of things like lean hogs, red wheat and copper (all of which I've been looking at IRL today) hence the confusion
    – MD-Tech
    Commented Feb 25, 2021 at 16:08

1 Answer 1

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The market cap of a commodity such as gold could mean the price per ounce multiplied by all ounces in existence. Or, it could mean the price per ounce multiplied by all ounces in investable form (coins and bullion).

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