Is it a good time to invest in gold?
The yellow metal is expected to give a higher return in 2022 owing to geopolitical tensions along with rising inflationary concerns supporting precious metal prices on lower levels. Though the US President Joe Biden has reaffirmed that no American troops would be deployed to Ukraine, which has receded the fears of a full-fledged global war, this may not necessarily mean that we are out of the woods yet. Considering other macroeconomic risk factors, such as upside pressure on inflation owing to high crude oil prices, volatility may continue to dominate the remainder of 2022.
Under the current circumstances, the outlook is bullish for gold, as the precious metal is historically seen as a hedge against inflation and major economic and geopolitical disruptions. The yellow metal soared to a 16- month high of $1,970 an ounce after Russia attacked targets across Ukraine. MCX Gold April's future has advanced by more than 7 per cent so far in 2022, owing to rise in investment demand and concerns for growth. Holding at the SPDR Gold ETF, the world’s largest Gold backed ETF, rose to 1,029.3 tonnes as on February 23, 2022 from 975 tonnes on December 31, 2021.