Surge in Gold ETFs Inflows
The investment landscape has recently seen a significant rise in gold exchange-traded funds (ETFs), with September 2025 witnessing a record six-fold jump in inflows. This surge can be attributed to several factors:
- Escalating geopolitical tensions and tariff-related uncertainties have shifted investor focus towards gold as a safe-haven asset.
- Purchases by global central banks have further bolstered gold's appeal.
- The lacklustre performance of the domestic stock market is driving investors towards gold ETFs.
Statistical Overview
- Inflows into gold ETFs surged by 578.28%, reaching Rs 8,363.13 crore in September 2025, up from Rs 1,232.99 crore in the previous year.
- Month-on-month net inflows rose by 281.96% from Rs 2,189.51 crore in August.
Advantages of Gold ETFs
Gold ETFs, which have gold as the underlying asset, offer several benefits:
- They provide a secure electronic alternative to physical gold.
- They offer liquidity, transparency, and cost-effectiveness.
- Gold ETFs offer attractive returns, portfolio diversification, and tax-efficient exposure.
Factors Driving the Trend
- Global factors like central bank buying and expectations of US rate cuts have turned gold into a preferred investment.
- Recent record-high gold prices, surpassing Rs 1,25,000 per 10 gram, have enhanced its appeal.
- Tax clarity in the Union Budget 2025-26, taxing long-term capital gains on gold ETF at 12.5%, has made them more attractive.
Market Expert Insights
Experts, including Chirag Mehta from Quantum AMC, emphasize the following points:
- Investors are considering a higher allocation to gold in portfolios due to its strong performance and outlook.
- Analysts predict continued inflows into gold ETFs, driven by a weak US dollar, geopolitical tensions, and increased global central bank purchases.
