Market Drivers for Gold in 2022

Gold has always been a treasured part of the lives of people around the world for religious, sentimental, and of course, value-related reasons. But in the last few years, there has been a significant surge in the demand for gold in different countries, leading to higher prices and increased imports. Considering a similar pattern for this year as well, here we are going to discuss the market drivers that will fuel the demand for gold, a step further. 

Ever-Increasing Demand for Gold

Gold has a lot of uses for people around the world. They use it for gifting, jewelry, religious purposes, and further as an investment asset. However, gold wasn’t performing that well in terms of its demand until last year when the demand for gold jumped to 79%. Keeping this shocking pointer in mind, the World Gold Council is forecasting a further increase in the demand for gold. Also, several governments like the Indian government have put restrictions on public gatherings like marriage functions. This indicates that the money which was meant for creating the pomp and show in weddings will now be used to buy gold, creating a huge market driver for gold in 2022. 

Taxed Regulation of Cryptocurrency

Recently, India regulated cryptocurrency by putting a 30% taxation along with 1% TDS that will be applicable on every single transaction related to crypto. Other countries as well, like the United States, the United Kingdom, Germany, among others, have also put a few regulations on cryptocurrency. These regulations, combined with the somewhat newness of cryptocurrency may shift people from investing in crypto to choosing gold as their investment option. This can act as a strong market driver for gold in 2022.

Equity Market Pullbacks

In view of the never-ending chain of new Covid19 variants, the equity markets are likely to experience a pullback. In addition to this, there are war-like scenarios in several parts of the world which will further put a risk to the equity market. As a consequence, the equity markets may experience a downfall leading to investors choosing gold as a safer option to invest their money and yield outputs. It is because, whenever the equity markets crash, the prices of gold increase considerably. Keeping the possibility of crashing equity markets, the investors are likely to put a big chunk of their investments in gold, acting as one of the most important market drivers for gold in 2022. 

Inflation Rates

As of January 2022, the inflation rates have been the highest since 1982 in the United States at 7.5%. This trend in the inflation rates will be supportive of the gold market. Since gold investments are always seen as a perfect hedge against inflation rates, more people will be buying gold to balance their portfolios and meet the rising prices of public commodities. 

Volatility in the Markets

The volatility rates of the markets have been very high since the beginning of the pandemic. In addition to this, there are several geopolitical concerns in different parts of the world like Yemen, Afghanistan, Syria, Russia, and so on. Ever since the arrival of Covid-19 and its stream of new strains, the stock markets have been extremely volatile. This has led to investors putting their money in gold instead of stocks because it has always been considered as a perfect hedge against all these changing economic scenarios. Gold is something whose value is most likely to appreciate over time when compared to stocks whose prices are extremely volatile. 

Affordable Gold Prices 

The market prices of gold have decreased when compared to the year 2020. As a consequence of this, a wider audience of buyers can buy gold, leading to a higher demand for gold in the coming times. Also, people are scared that the prices of gold may rise in the coming years. So they are trying to take as much advantage of low gold prices as they can. In addition, there are various festivals, especially in the Indian culture like Akshaya Tritya, Dhanteras, Janmashtami, where people tend to buy a lot of gold. Although this is not a special case for the year 2022, when combined with other market drivers given above, the demand for gold is going to rise significantly when compared with the last year. 

The Introduction of Digital Gold

With the introduction of digital gold and several other ways like Sovereign Gold Bonds and Gold ETFs where the investors do not even have to step out of their homes to buy gold, more people are inclining themselves towards buying gold as an investment asset. Digital gold has numerous advantages when compared to physical gold. There are several issues like safety, storage, additional costs for maintenance, considerable making charges, etc. regarding physical gold. On the other hand, digital gold solves all of these problems. It is because the seller of digital gold takes care of all these issues by offering you storage vaults for your gold, thereby eliminating any risks for theft. Also, in the case of Sovereign Gold Bonds and Gold ETFs, the investment procedure is very long whereas, in the case of digital gold, you can buy gold within 5 minutes. 


All these market drivers mentioned above are likely to increase the demand for gold in the year 2022. However, these forecasts are based on the data collected from previous years, and investors are advised to take a rough idea of how the gold market may look in the coming months. Investors can diversify their portfolios by investing in a variety of different assets like gold, silver, cryptocurrencies, and so on. If you are looking to invest your money in gold, you must definitely consider buying digital gold from platforms like OroPocket where investors can start investing in gold starting from Rs. 1 and can have their digital gold converted in a physical form easily. Most importantly, your digital gold is safely stored in physical vaults.