Gold price concluded the year 2021 just 4% lower, finishing at $1,806/oz, as prices recovered at the close of the year based on the fast-spreading Omicron variety. In India, gold is now trading for Rs 48,535 (per 10 gms). The current Gold price in USD is $1840/oz.
Gold saw a pause this year: But will it shine in 2022?
According to the Motilal Oswal research, inflation has been one of the primary highlights for 2021. Rising inflationary expectations have been generating market turmoil for a long time. But the panic began when US Governor Powell admitted the same and began to act on it.
Market participants did, without a doubt, lower the next year’s rate rise forecasts, even if Gold prices recovered from that drop,” Damani adds.
According to a World Gold Council analysis, while rate rises can create headwinds for gold, history suggests that their impact may be modest. Simultaneously, rising inflation and market pullbacks will likely continue demand for gold as a hedge. Jewelry and central bank gold demand may give additional longer-term support.
Gold prices near 1 week high amid Omicron threat:
“The 2022 view for Gold price comes down to which dynamics will tip the scales,” said Juan Carlos Artigas, Global Head of Research at the World Gold Council. Even though the price of gold fluctuates, its value as a highly liquid hedge stays constant.
2020 was a Black Swan year, with gold returning 25% of its value. “At the time of the pandemic’s emergence, we were preparing ourselves for the spread of the unknown.