Gold Demand Likely to Be Strong in 2022: World Gold Council – News Couple

Gold Demand Likely to Be Strong in 2022: World Gold Council

The World Gold Council (WGC) said in a report that gold demand is likely to remain weak this year after the ongoing Covid-related turmoil in India.

However, in 2022, the impact of pent-up demand for the precious metal is likely to herald a period of strong demand.

Gold demand may be quieter than expected this year, after India’s long battle with Covid-19, according to the report – drivers of Indian gold demand.

However, the report said imports remain strong and retail demand is expected to rise, as restrictions are gradually lifted across the country.

In 2022, economic growth and the impact of pent-up demand for gold is likely to herald a period of strong demand, although any future coronavirus outbreaks may create further uncertainties.

Looking to the future, the report added, it appears that if the industry takes steps to become more transparent, more standardized and more aligned with its global peers, the gold market in India is likely to benefit from positive demographics and socio-economic changes.

According to the report, higher income is the strongest driver of Indian demand for gold in the long run, which bodes well for Indian demand for gold as the economy complements a strong demographic dividend.

“As our econometric model demonstrates, rising incomes is one of the single largest drivers of long-term demand for gold. This suggests that as India’s economy grows, demand for gold should increase,” the statement read.

However, Indian demand is facing short-term challenges from declining household savings rate and agricultural wages, the WGC report noted.

The report said that households are saving relatively less than in the past, which could reduce the amount of capital they allocate for gold.

Increasing financial inclusion, which provides investors with other sources of their savings beyond physical gold, government policies that can affect demand and inadvertently boosting the informal market in India and declining agricultural wages despite government measures in recent years are few other challenges in the long run. Short, the report said.

“Gold prices, monsoons, changes in taxes and inflation are the short-term drivers of gold while household income and government fees will drive long-term demand. We are confident that these results will shape the industry’s strategy around strengthening established agreements and developing new ways to attract and sustain demand in the The future, added WGC Regional CEO, India Somasundaram PR.

(The title and image for this report may have been reworked only by the Business Standard staff; the rest of the content is automatically generated from a shared feed.)

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