Gold Prices Expected to Reach USD 3,600 per Ounce by End of 2022

Strategic Insights -

Ventura Securities, a leading brokerage firm, has predicted that gold prices could climb to USD 3,600 per ounce by the end of December 2022, driven by global economic headwinds, geopolitical risks, and robust investment demand. This forecast is based on the firm's latest outlook, which highlights the metal's resilience and potential for growth. In fact, Comex gold futures have already hit an all-time high of USD 3,534.10 on August 7, with the most-traded October gold futures scaling a record high of Rs 1,02,250 per 10 grams on the Multi Commodity Exchange on August 8.

Key Takeaways:

  • Global gold demand in the second quarter of 2022 rose 3% year-on-year to 1,249 tonnes, valued at USD 132 billion, reflecting a 45% surge in value terms.
  • Investment inflows through exchange traded funds (ETFs) have been particularly strong, with global gold ETF holdings up 16% at 3,616 tonnes as of June 30, and assets under management jumped 64% year-on-year to USD 383 billion.
  • India has mirrored this global trend, with domestic gold ETFs recording a 42% rise in holdings to 66.68 tonnes in the year to June 30, while assets under management (AUM) nearly doubled to Rs 64,777 crore.
  • Investor accounts in gold ETFs rose 41% to 76.54 lakh, registering a 317% increase over the past four years.
  • Venture noted that investor behaviour is shifting, with younger generations favouring digital avenues of gold investment such as ETFs, fractional ownership, and digital gold platforms.
  • Physical jewellery demand remains resilient, but hybrid strategies combining offline and online channels are gaining traction.
  • Gold has delivered positive annual returns in 14 calendar years, reinforcing its status as a proven store of value and a hedge against inflation, with average annual returns of 23% over the last three years compared to 11% for the Nifty 50 index.

Statistics:

  • Global gold demand rose 3% year-on-year to 1,249 tonnes in the second quarter of 2022.
  • Global gold ETF holdings increased 16% to 3,616 tonnes as of June 30.
  • Assets under management of gold ETFs jumped 64% year-on-year to USD 383 billion as of June 30.
  • Domestic gold ETFs recorded a 42% rise in holdings to 66.68 tonnes in the year to June 30.
  • Assets under management (AUM) of domestic gold ETFs nearly doubled to Rs 64,777 crore in the year to June 30.
  • Investor accounts in gold ETFs rose 41% to 76.54 lakh.
  • Gold has delivered positive annual returns in 14 calendar years over the past 20 years.
  • Average annual returns of gold over the last three years were 23%, compared to 11% for the Nifty 50 index.

Sources:

  • Ventura Securities
  • Indian National Press (Bombay) Pvt. Ltd., distributed by Contify.com