Gold Experts’ Say on the Gold Future and Expected Gold Price in 2022 in India

Gold is one of the precious metals loved by everyone. The gold market is not stable; it keeps fluctuating. You never know when to invest and buy gold. What’s more helpful than having an expert’s opinion on the expected gold price in 2022?

Experts’ Opinion on Gold Price in 2022

The universal acceptance of gold is unmatched. Even in a developing country like India, gold has a substantial stand. No matter how poor a family is, they will never wed off their daughter without giving gold, even if it’s just a trinket. In India, gold is found everywhere, right from temples to huge castles. India is the second-largest gold consumer in the world. In the global market, the yellow metal is volatile.

It’s been more than a month since we entered 2022; still, the Covid-19 situation continues to persist now that the Omicron variant haunts us. The pandemic and the periods of high inflation have become entrenched in the global market. There’s something you need to know about inflation. Not always, inflation is bad, particularly for the gold market. As inflation penetrates deep into the Indian economic market and the currency sees a sharp fall, people immediately invest and buy gold, their saviour. As a counterattack to inflation, the yellow metal always blooms.

Also Read: Factors that affect gold prices in India | Tomorrowmakers

For about half a decade, the gold price was continuously increasing, but last year the global market saw a pause in the spike of Gold price. Interest rate and the gold rate are inversely related; a rising interest rate means a decline in the gold price. The US Federal Reserve has signalled three rate hikes in the financial year 2022, and the primary question is what gold scope will it create?

Daily, the gold rates are quoted differently. In February 2022, owing to the ongoing Ukraine-Russia conflict, the price of the yellow metal rose for the seventh consecutive day. On 15th February, the price of gold was ₹ 50,205 per 10 grams on the Multi Commodity Exchange (MCX). “Due to the heightened tension between Russia and Ukraine, the investors are pulling back. Also, the Fed may increase by 50 bps because of higher than expected inflation number.” Bhavik Patel, Commodity & Currency analyst, Trade bulls Securities.

Also Read: Buying gold? 5 things to check before you buy

In the union budget 2022, the government extended overwhelming support to the jewellery industry. “The union budget has mentioned a simplified framework for exporting jewellery through e-commerce websites. This will attract international customers and boost up sales to make up for the losses. But the absence of mention of any GST reduction against the gold purchase seems problematic,” says Ketan Choksi, jewellery designer & MD, Narayan Jewellers.

Also Read: Gold trend over 20 years: How to become a smart gold buyer

The current geopolitical tension is constantly dominating the prices of gold. With the rising inflation, experts are talking about a hike in the interest rate. Higher inflation is said to boost the demand for gold in future. The yellow metal is expected to give a higher return in 2022. The world’s largest gold-backed ETF, the SPDR Gold ETF. rose to 1,029.3 tonnes in February from 975 tonnes in December. Furthermore, the Fed policy meeting is also said to weigh as an important deciding factor for investment. Hence experts and market participants are saying that one should be ready to buy at dips to average out the cost. 

“History is a witness to the truth that gold does well in periods of high inflation. In long-term inflation, gold acts as a portfolio hedge. In 2022, given the transition to mid-cycle, higher bouts of equity market volatility are expected. However, this can be alleviated to some extent by gold. The scanty USD weakness should act as a pillar for long-term gold investment,” remarks Standard Chartered Wealth India report.

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