InvestorQ : How has 2021 been for Gold Investments in India? What’s the outlook for the next year?
sanjana Tulsiani made post

How has 2021 been for Gold Investments in India? What’s the outlook for the next year?

Niharika Kamble answered.
12 months ago
2021 is almost over, and the year has been a fruitful one for the Indian capital market. The equity market rallied unprecedentedly as the Indian economy recovered from the negative repercussions of COVID-19.

However, Gold lost some of its shine in 2021, with cryptocurrencies rising as a new investment avenue for Indians who became the highest holders worldwide. However, it still provided good returns as Gold investments clocked 2.8% absolute returns as per the MCX data (as of December 17, 2021). Some major reasons for the lesser but stable growth were rising GDP, a strong greenback, and ample liquidity reported by most countries in the last few quarters.

However, it remains to be seen how well Gold returns will hold amid the rising fears of the new COVID variant named Omicron. If the equity market sees a major sell-off, it can result in the Gold prices rising as investors would look towards finding liquidity by leveraging other assets such as Gold. It has always been used as a hedge against other asset classes, it can benefit, owing to volatility in other asset classes.

As long as the future outlook of Gold is concerned, amid the fear of Omicron, Gold demand is rising. Gold February futures contracts settled at $1,798.35 per troy ounce on Friday, up 0.01 percent. At MCX, Gold has its support level at Rs 48,400-48,220 and resistance at Rs 48,800-49,050, with the experts holding their stance for Gold to be an ideal hedging instrument in current uncertain times.