Gold is taken into account a secure asset for traders to maneuver to throughout instances of world uncertainty. This time, a tariff struggle launched by US President Donald Trump has created uncertainty and destabilized world markets. |Photograph credit score: David Grey
It has been a tumultuous yr for Indian traders, with total market quantity hitting its lowest level in December 2025 and the benchmark Nifty’s returns falling into destructive territory. Nonetheless, this yr there was elevated investor curiosity in gold exchange-traded funds (ETFs).
Trade-traded funds (ETFs) monitor the efficiency of the underlying belongings. When an investor buys the Nifty 50 ETF, they’re shopping for models in a portfolio that tracks the efficiency of the index. Gold ETFs monitor the efficiency of gold bullion.
In line with information from the Heart for Monitoring Indian Financial system (CMIE), internet inflows into gold ETFs rose to Rs 25,566 crore from January to November 2025, almost 3 times as a lot as in the identical interval in 2024. The proportion of internet inflows into gold ETFs throughout all open-ended schemes elevated to three.2% between January and November 2025. This determine is lower than 1% for the corresponding interval past 2021-2022, making this yr the very best yr ever for gold ETFs. Internet inflows into all open-ended schemes fell by 4.8% to Rs 7.9 billion by November 2025. This index has elevated 2.5 instances as of November 2024, clearly displaying that gold ETFs are gaining recognition whereas funding curiosity generally mutual funds is being subdued.
A lot of this has to do with Indian investor conduct, world elements and native market situations.
Gold has all the time been bought frequently as Indian households count on the worth to rise. In line with the World Gold Council, gold costs rose 61% to Rs 380,000 per kg in November 2024, a historic rally. On the identical time, returns in Indian shares had been suboptimal and costly, with lots of the much-hyped 2024 listings buying and selling beneath their preliminary costs.
Gold is taken into account a secure asset for traders to maneuver to throughout instances of world uncertainty. This time, a tariff struggle launched by US President Donald Trump has created uncertainty and destabilized world markets.
Moreover, central banks world wide are regularly rising their gold reserves to diversify their holdings and scale back dependence on the greenback, successfully decreasing the volatility that would outcome from selections made underneath the Trump administration.
Gold ETFs are a easy, low-cost, and secure approach to put money into gold. One unit of a gold ETF prices round ₹140 to ₹150, which is cheaper in comparison with shopping for gold in grams. ETFs are simple to purchase as a result of there aren’t any charges or different expenses that scale back the precise buy worth of gold.
In the meantime, consultants warn that the beneficial properties to this point are historic and is probably not sustainable subsequent yr. “Gold has risen sharply and though basic tailwinds stay, we count on returns to be average subsequent yr,” mentioned Sidharth Srivastava, head of ETF merchandise and fund managers at Mille Asset Funding Managers (India). “Practically 80% beneficial properties in a single yr can not proceed ceaselessly. Nonetheless, over the long run, gold ETFs will proceed to function efficient wealth creation and portfolio diversification instruments, and we count on continued investor curiosity on this house.”
Some are even calling the elevated curiosity in gold ETFs “FOMO” (concern of lacking out). “FOMO because of the sharp rise in gold costs seems to have additionally affected funding demand in India in current months,” Kotak Institutional Analysis mentioned in a current report.
However a lot of the outlook for funding autos backed by the yellow metallic relies upon largely on solutions to key questions, reminiscent of whether or not Indian shares will proceed to supply suboptimal returns, whether or not the greenback will recognize, and whether or not central banks will proceed to purchase the identical quantity of gold.
