Gold exchange-traded funds (ETFs) witnessed a massive surge in inflows in January, as investors poured Rs 3,751.4 crore into these funds, according to the Association of Mutual Funds in India (AMFI) data on Wednesday.
The inflows in January were the highest-ever recorded for gold ETFs in a single month, as Rs 640 crore was invested in December 2024.
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Gold ETFs have witnessed remarkable growth over the past year. On a yearly basis, these funds recorded a massive 471 per cent increase in inflows, rising from Rs 657 crore in January 2024 to Rs 3,751.4 crore in January 2025.
In addition to the surge in investments, Gold ETFs delivered impressive returns, offering an average gain of nearly 7.29 per cent in January.
The surge in investments was driven by multiple factors, including rising gold prices and increasing market volatility amid US President Donald Trump’s tariff threats. With global uncertainties and geopolitical tensions affecting investor sentiment, many turned to gold as a safe-haven asset.
Additionally, expectations of interest rate cuts by major central banks, including the US Federal Reserve, have made gold more attractive.
Lower interest rates reduce the opportunity cost of holding gold which further boosted demand.
Investors are also using gold ETFs to hedge against inflation and diversify their portfolios. As inflationary pressures continue to impact economies worldwide, gold remains a preferred asset for those seeking stability.
Gold prices have been fluctuating after hitting an all-time high earlier this week.
However, prices dipped on Wednesday following hawkish comments from US Federal Reserve Chair Jerome Powell, who signalled a slower approach to rate cuts.
On the Multi Commodity Exchange (MCX), gold futures for April delivery declined by Rs 345 to Rs 85,178 per 10 grams.
In the global market, gold futures fell 0.18 per cent to $2,892.76 per ounce.
On February 10, gold prices were surged to new record highs in the domestic futures market as uncertainty over the US President Donald Trump’s tariff policies increased demand for the yellow metal.
On that day, the price of 24-carat gold was Rs 8,537 per gram, while 22-carat gold was Rs 8,332 per gram, according to the India Bullion and Jewellers Association (IBJA).
