Gold ETFs see strong inflows as investors turn to digital gold
Gold’s recent price correction appears to have renewed investor interest in the yellow metal, with gold exchange-traded funds (ETFs) witnessing estimated net inflows of around Rs 3,300 crore in October. With the festive and wedding seasons underway, experts noted that investors are increasingly looking at gold ETFs as an alternative to buying physical gold.
Gold prices have declined nearly 12% over the past six months, according to the data cited in the industry assessment. However, expectations of sustained investment demand and central bank purchases have kept the long-term outlook positive. The World Gold Council (WGC), in its latest quarterly outlook, expects festive and wedding-related demand, along with continued central bank buying, to support the market.
The growing interest in gold ETFs is also reflected in their assets under management (AUM), which increased from around Rs 1.58 lakh crore in April 2026 to Rs 1.91 lakh crore in October.
Gold ETFs have also recorded gains over the past year, although returns have varied across schemes. Nippon India ETF Gold BeES delivered a one-year return of 12.58%, followed by Invesco Gold ETF at 12.50% and ICICI Prudential Gold ETF at 12.39%, according to the figures provided. Across 22 gold ETFs, the average return since Diwali 2025 was 9.22%.
Value Research data showed that the gold funds category generated returns of 6.94% year-to-date, 18.64% over one year, 31.90% over three years and 23.15% over five years as of October 26, 2026.
Unlike jewellery and coins, gold ETFs do not involve making charges and can be held electronically in demat accounts. They also eliminate concerns around physical storage, theft and locker expenses. Investors can buy and sell ETF units on stock exchanges during trading hours, with prices linked to domestic gold prices.
Pankaj Mathpal, Founder and CEO of Optima Money, said “The outlook for gold remained positive, supported by investment demand and expectations of a modest decline in overall supply”.
However, he cautioned that higher interest rates, bond yields and a stronger US dollar could trigger volatility.
“From an investor’s perspective, this is not the time to chase gold prices or make large lump-sum investments,” Mathpal said, adding that investors could consider accumulating gold through ETFs in smaller quantities, depending on their existing portfolio allocation and long-term financial goals.
Gold, he said, should primarily be treated as a portfolio diversifier and a hedge against uncertainty rather than an instrument for short-term speculation.