Gold ETFs See ₹3,300 Crore Inflows in October Amid Festive Buying

Gold exchange-traded funds (ETFs) attracted estimated net investments of about ₹3,300 crore in October. Investors stepped up purchases following a nearly 12 per cent correction in gold prices over the preceding six months, viewing the decline as an opportunity to accumulate the precious metal ahead of Diwali.

Assets under management (AUM) for gold ETFs increased steadily from ₹1.58 lakh crore in April to around ₹1.91 lakh crore in October, reflecting growing investor interest in the category.

The World Gold Council, in its latest quarterly outlook, noted that gold demand is expected to receive support from the ongoing festival and wedding seasons. Additionally, continued purchases by central banks, which have maintained gold accumulation at historically elevated levels, could support prices over the next 12 months.

In terms of performance, gold ETFs delivered an average return of 9.22 per cent since the previous Diwali, celebrated on October 20, 2025. Among the 22 schemes, Nippon India Gold ETF BeES led the category with a 12.58 per cent return, followed by Invesco Gold ETF at 12.50 per cent and ICICI Prudential Gold ETF at 12.39 per cent.

Data from Value Research indicated that the gold funds category delivered 18.64 per cent returns over one year, 31.90 per cent over three years, and 23.15 per cent over five years as of October 26, 2026.

Compared to physical gold, ETFs eliminate making charges, storage costs, and concerns over theft. Units are held electronically in demat accounts and can be traded on the National Stock Exchange and the Bombay Stock Exchange at market-linked prices, allowing investors to accumulate gold in smaller amounts.

Pankaj Mathpal, Founder and CEO of Optima Money, stated that the outlook for gold remained positive, supported by investment demand and expectations of a modest decline in supply. However, he noted that higher interest rates, bond yields, and a stronger US dollar could introduce volatility. Mathpal advised investors to avoid large lump-sum investments and instead accumulate gold gradually through ETFs, treating the metal as a portfolio diversifier rather than a short-term trading opportunity.

"The surge in gold ETF investments reflects a rational shift among retail investors who are taking advantage of recent price corrections ahead of the festive season. Moving capital into digital and electronic gold formats helps eliminate physical storage risks and unnecessary making charges. However, as financial experts advise, gold should be used primarily as a disciplined portfolio diversifier rather than a tool for short-term trading, especially given potential macroeconomic volatilities like fluctuating interest rates and currency movements." — Dr. Shishir Gupta, Founder & CEO, StartupLanes