Gold ETF inflows decline by 40% to Rs 1,256 crore in July. Here's why
The inflows in Gold ETFs in July declined by nearly 40% to Rs 1,256 crore against Rs 2,080 crore in June. On a year-on-year basis, the inflows have slipped 6% from Rs 1,337 crore in July 2024.Market experts believe that the sustained demand reflects gold's continued appeal as a portfolio diversifier amid lingering macro uncertainties, including volatile global interest rate expectations and geopolitical risks.Also Read | Sectoral & thematic mutual funds see record jump in inflows to over Rs 9,400 crore. Is it time to enter or stay cautious? 'Gold ETFs witnessed net inflows of INR 1,256 crore in July 2025, moderating from the robust INR 2,081 crore recorded in June but still marking the third consecutive month of positive flows. The sustained demand reflects gold's continued appeal as a portfolio diversifier amid lingering macro uncertainties, including volatile global interest rate expectations and geopolitical risks,' said Nehal Meshram, Senior Analyst – Manager Research, Morningstar Investment Research India.Another expert says that though the slowdown may appear abrupt, it comes against the backdrop of a 41% surge in gold fund values over the past 12 months and the four factors behind the softening of gold ETF demand includes profit-taking at record highs, portfolio rotation into equities, attractive yields in short duration debt instruments, and renewed risk appetite in global markets.'While the slowdown may appear abrupt, it comes against the backdrop of a 41% surge in gold fund values over the past 12 months and the yellow metal scaling new all-time highs, with the latest peak of Rs 1.02 lakh per 10 grams scaled last week,' said Subho Moulik, CEO & Founder at Appreciate.These ETFs saw outflows for two consecutive months—Rs 77.21 crore in March and Rs 5.82 crore in April—but have recorded positive inflows over the past three months.Also Read | Gold price hits record high: Should you buy now or beware? In the current financial year so far, gold ETFs have received a total inflow of Rs 3,623 crore, and in the current calendar year, the total inflow in these ETFs has been Rs 9,277 crore.According to Nehal, 'Year-to-date, Gold ETFs have garnered cumulative inflows of over INR 9,277 crore, underscoring their growing role as a strategic allocation in portfolios, both for wealth preservation and as a counterbalance to risk assets.'In July, Gold ETFs delivered an average return of 1.18% with the Tata Gold ETF being the top performer. The scheme delivered 2.04% return in July. Nearly five gold ETFs gave a 1.15% return in the same period. Invesco India Gold ETF gave the lowest return in March of around 1.09% in July'While prices have remained elevated, investor interest appears supported by central bank buying trends globally and persistent concerns over equity market volatility and the domestic investors are also likely viewing gold allocations as a tactical hedge ahead of key economic data releases and policy decisions in the coming months,' Nehal said.Also Read | Ethereum outpaces crypto market with 41% monthly surge; Bitcoin at $119K. Should you buy? The assets under management (AUM) of Gold ETF went up by 4% from Rs 64,777 crore in June to Rs 67,634 crore in July. On a yearly basis, the AUM has surged by nearly 96% from Rs 34,455 crore in July 2024.According to the latest data by the Association of Mutual Funds in India ( AMFI ), only one new scheme was launched in the category in July. Motilal Oswal Gold ETF collected Rs 6 crore.
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