Gold ETFs to Continue to Witness Robust Inflows

SEATTLE (Scrap Monster): The most recent data published by the Association of Mutual Funds in India (AMFI) suggests strong inflows into gold exchange-traded funds (ETFs) during the second quarter of the current year. The inflows amounted to INR 1,328 crore during the quarter. The strong inflows are likely to continue in the forthcoming months as well, noted market experts.

The inflows have recorded decline, compared to the same quarter a year before. The inflows had totalled around INR 2,040 crore a year before, mainly driven by high economic uncertainties during that time caused by Covid-19 pandemic crisis, which forced many investors to turn to safe gold assets. The reduced inflows this year are mainly attributed to the optimistic economic recovery.

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The inflows have slowed down when matched with those of INR 1,779 crore during Q1 this year.

Meantime, the assets under management (AUM) of gold-backed ETFs rose sharply to INR 16,225 crore at the end of June this year. This compares with INR 10,857 crore in end-June last year.

The market experts shared the view that the current fiscal is likely to attract more inflows into gold ETFs, triggered by strong gold prices and increased realization by customers on the importance of gold in their asset portfolio.