There has been a pent-up demand for gold from the year 2020 owing to pandemic-induced lockdowns, suppressed festival shopping and postponed weddings. Therefore, the purchase of gold has spiked up and so have its imports. Gold imports to India already more than doubled from USD 22 billion in 2020 to USD 55.7 billion in 2021. Even in the new year 2022, the pent-up demand for gold is expected to keep increasing its purchase and imports. As a result, prices of gold are bound to rise simultaneously this year.

How to Benefit from Investments in Gold in 2022?

Since prices of gold are expected to shoot up in 2022, this could be the right time to invest in this valuable commodity and earn high returns through capital gains.

In that case, it's often better to invest in gold funds instead of physical gold. These are open-ended funds (so you can enter, and exit based on your convenience) that use gold as a precious commodity to help investors create wealth. They're invested in units of a gold exchange-traded fund (ETF).

You can invest in these mutual funds online on the website or app of a reputed asset management company (AMC). So, you need not store physical gold that could be stolen at any time. Instead, you can safely invest in gold through mutual funds, which are safely regulated by the Securities and Exchange Board of India (SEBI). It also monitors and reports on their performance regularly. Therefore, you can also measure and predict your returns.

Here are the other advantages of investing in these funds:

• Highly liquid investment: You can liquidate gold funds hassle-free on short notice. So, they can protect you against an unpredictable incident. You can redeem as many units of the fund as you want on any business day during market hours. But to sell units, the NAV of the previous day is considered. The money is usually disbursed just within 2-3 working days right after your funds are traded off.
• Options to Invest Less: People often hesitate to buy physical gold as it's very expensive. But you can invest as little as ₹500 in these funds with a Systematic Investment Plan (SIP). This is especially helpful if you have a low income yet want to invest in gold.
• Discipline in investment: If you invest in gold mutual funds online via an SIP plan, you can build a disciplined approach towards regular investments. Along with that, your returns will continue to grow with the power of compounding. Thus, you can increase the chances of meeting your financial goal with the earned returns.
• Tax savings: Gold funds also offer tax benefits. On a short-term investment (for a maximum tenure of 36 months), you need not pay taxes directly on your gains. On long-term capital gains, you must pay a surcharge, taxes at 20% and a cess at 4% with indexation benefits.

Now that you see how easily you can invest in gold mutual funds online and profit from the same since gold prices are forecast to rise in 2022, consider beginning your investments right away.