Ashraf Rizvi, Founder and CEO, Gilded

As each year draws to a close, it is human nature to think only of the last twelve months. At the same time, it is good to remember that prudent investments are often held for the long term. Gold is one of those investments that has consistently outperformed cash deposits and inflation when held for the long term. Over shorter time horizons of course, gold sometimes goes up and sometimes goes down. Over the past year, gold in India has indeed seen both a rise and a fall in demand, reaching pre-pandemic levels during the holiday season due to pent-up demand as well as freebies. . With digitization becoming more and more prevalent in our daily life, digital gold has also gained popularity in India, as it combines the traditions attached to the yellow metal that the older generations enjoy with the new age technology desired by the people. Millennials and Generation Z.

The pandemic has highlighted the importance of creating wealth and many have resorted to investing in gold, widely known as a safe haven in times of turbulence. Digital gold has emerged as a great investment option, especially for young first-time investors, as it is easy to buy through fractional investments and to hold as an asset for the long term.

The outlook for digital gold in 2022 is positive as people continue to feel comfortable with digital alternatives that make owning physical gold easier than ever before. The recovery from the pandemic will also push demand for digital gold which can often prove to be more accessible than physical gold in a safe way, as new strains of the virus push buyers to maintain COVID protocols. Millennials and Gen Zs are expected to become more visible in managing personal finances as more of them enter the workforce and begin building their investment portfolios. Given that they are largely digital natives, digital gold and other digital alternatives, along with wealth tech applications, are expected to see more traction from this demographic.

The adoption rate and its demand in 2022 will also depend on the regulations and policies put in place by the government. In the new year, we hope for clearer regulations that will allow investors to make informed investment decisions and help them continue on their path to financial freedom.

The author of this article is Mr. Ashraf Rizvi, Founder and CEO, Gilded

The views and opinions expressed do not belong to IIFL Securities,

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