Indian Gold ETF assets drop for third month in a row
July 11, 2013 06:30:38 AM
The erosion of assets held by gold-backed ETFs in India which started in the month of April, has continued for the third consecutive month in June-says the Association of Mutual Funds in India (AMFI)
By Paul Ploumis
MUMBAI (Scrap Monster) : The erosion of assets held by gold-backed ETFs in India which started in the month of April, has continued for the third consecutive month in June-says the Association of Mutual Funds in India (AMFI).
According to data posted in the official website of the association, the net holdings in the gold backed Exchange Traded Funds (ETFs) declined by 9.2% during the month of June when compared to the previous month. The net holdings in ETFs as on June 30th stood at Indian Rupees 96.1 billion (equivalent to $1.6 billion).
The value of Indian gold ETFs had touched a record high of INR 120.6 billion ($2.01 billion) during January this year. The June statistics suggest that the value of assets in gold ETFs has lost 20% from its January peak. The global gold ETFs also witnessed deep cuts. For the first time since May 2010, the value of assets in global gold ETF products has retreated to levels below 2,000 metric tons.
According to market analysts, the demand for ETF products moves in line with the demand in the physical market. With gold prices continuing its volatile journey, investors are seen shying away from the market. AMFI indicates the probability of physical demand picking up towards the end of July with the advent of festive season in the country. Inflows into gold ETFs may too gather momentum with the beat.
