Gold ETFs Provide Superior Long Term Investment Opportunities

SEATTLE (Scrap Monster): The latest gold industry data suggests gold’s increasing popularity as an investment option among Indian investors. The simultaneous dip in demand for gold jewellery indicates visible shift in investors’ sentiments from traditional gold jewellery to gold-backed exchange traded funds (ETFs).

Quting recent trade data published by the World Gold Council (WGC), Abhishek Bansal, Founder and Chairman, ABans Group of Companies noted that jewellery demand in the country posted 48% year-on-year decline in July-September to 52.8 tonnes, as compared with 101.6 tonnes a year before. At the same period, gold’s investment demand surged by 52% to total around 33.8 tonnes. The phenomenal jump in gold prices is being cited as the main reason behind the huge expansion of investor base in gold ETFs, he observed.

In October 2020, the total number of gold ETF folios stood at 7.82 lakh. This compares with 3.77 lakh in October last year. The assets under management (AUM) skyrocketed by 147% during this period from INR 5,652 crore to INR 13,969 crore.

ALSO READ: Gold ETF Inflows Hit Fresh Record in 2020

According to Bansal, the investments in gold ETFs will continue its growth trajectory, as they offer better long term investment opportunity, as compared to gold bullion or jewellery. The yellow metal is likely to sustain its bullish trend, thereby driving it to new heights in the long term, he added.