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Gold ETF inflows in July up 35%

10 August 2020


At Rs 921 crore, gold ETF inflows in July were 35% higher than the April-June average of Rs 680 crore.The growth was triggered by retail investors rushing to take advantage of the rising gold price, leading to falling demand for physical gold. The number of gold ETF folios added was double the monthly average at 61,000 accounts. NS Venkatesh, CEO of, AMFI said, “With rising gold prices, people are more convinced to purchase electronic gold than physical gold, as investors want to take advantage of rising gold prices with higher returns. Under the pandemic situation, people’s sentiment on investment in gold as a safe haven stays unchanged.” According to the World Gold Council, India’s gold demand for the April-June quarter, 2020, had contracted by 70% to 63.7 tonne compared to the previous year.

The gold ETF category had received a net inflow of Rs 921 crore in July, which is 35% higher than the Q1FY21 average of Rs 680 crore, as gold prices touched the record high of Rs 50k per 10 gram. In July, the number of new gold ETF folios added stood highest at 61,000, which is almost double the monthly average of 34,000 folios recorded this year, according to AMFI data. The asset under management of Gold ETF stood at Rs 12,940 crore as of July, 2020.


Asset allocators have found a majority of gold ETF purchases in India were made by retail and and high net-worth individuals (HNI) customers with predominant non-institutional money coming in. Lakshmi Iyer, Chief Investment Officer (Debt) & Head Products, Kotak Mahindra Asset Management Company, “Gold ETF is a great way of ownership of gold, since there is no hassle of storage and liquidation, which is why the folio count has multiplied and that is a very positive trend.”Globally gold-backed ETFs have also recorded eighth consecutive month of positive flows, adding 166 tonne in July — equivalent to $9.7 billion or 4.1% of assets under management (AUM). With global holdings having once again reached a new all-time high of 3,785t and the price of gold hitting a record high of over $2,000/oz recently, has left global AUM standing at $239 billion.

“The trend is similar in India, gold ETFs in India, saw $98 million inflows in the month of July reaching a total of $1,510 million. Low or negligible interest rates and enormous liquidity seem to underpin all monetary stimulus. This adds to gold’s appeal among investors and portfolio advisors in preserving value in such times,” Somasundaram PR, MD, World Gold Council — India, said.