Gold ETFs see inflows of Rs 292 crore in May after two straight months of outflows

Economic Times

11-06-2025

ETMarkets.com Gold ETFs saw inflows of Rs 292 crore in May, reversing a two-month streak of outflows.
Gold-based ETFs have received inflows in May of Rs 292 crore after two straight months of outflows, according to the Association of Mutual Funds in India (AMFI). In March and April, gold ETFs saw an outflow of Rs 77.21 crore and Rs 5.82 crore, respectively.
'The renewed traction in May signals a gradual return of investor interest, likely driven by resilient gold prices and sustained global uncertainties that reinforce gold's appeal as a strategic hedge. The uptick also shows that investors are regaining confidence in gold, as it continues to offer stability amid mixed signals from equity and bond markets,' said Nehal Meshram, Senior Analyst – Manager Research, Morningstar Investment Research India.
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'Furthermore, the relative stability in gold prices through May have provided a more attractive entry point for investors looking to build or rebalance allocations toward safer assets,' Nehal added.
According to Motilal Oswal Private Wealth, global gold demand hit a Q1 record in 2025, driven by strong ETF inflows and continued central bank buying despite a slowdown from last year, while jewelry demand fell sharply due to high prices. The investment demand saw a dramatic 170% year-on-year rise, driven by a strong rebound in gold ETF inflows, particularly in Europe, Asia, and India. The investment in gold ETFs led to a significant jump in gold investment demand in Q1 2025, reaching 552t, marking a 170% year-on-year increase, the report said.
'The surge was primarily driven by a sharp revival in gold ETF inflows, which recorded their strongest quarterly demand for three years, and the global gold-backed ETFs saw holdings increase by 226t during the quarter, bringing collective holdings to 3,445t. This was boosted by trade tensions and gold price momentum, with investors rushing for the safety of gold,' the Motilal Oswal Private Wealth report said.In the month of May, gold ETFs offered an average return of 1.10%, with Tata Gold ETF emerging as the topper out of 19 funds in the category. Tata Gold ETF offered a 2.53% return in May. Axis Gold ETF and SBI Gold ETF gave 1.35% and 1.34% returns respectively in the said time period.
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Mirae Asset Gold ETF and Zerodha Gold ETF gave 1.15% returns each in May. UTI Gold ETF, Invesco India Gold ETF, and LIC MF Gold ETF gave 0.50%, 0.26%, and 0.15% returns, respectively, in the same period.
The assets under management (AUM) of gold ETFs surged by 2% on a monthly basis to Rs 62,452 crore in May from Rs 61,422 crore in April. 'The resurgence in flows also highlights the growing role of Gold ETFs in strategic asset allocation, especially as investors seek to manage risk in an increasingly uncertain investment environment,' Nehal said.
'While inflows are yet to reach the levels seen earlier in the year, the trend suggests a gradual and measured return of interest in gold, underpinned by its long-term diversification benefits,' added. Gold ETFs are exchange-traded funds that track the price of physical gold. Each unit of a Gold ETF is backed by a specific quantity of gold, usually equivalent to one gram. They are listed on stock exchanges, and you need a demat and trading account to buy and sell them.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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