Gold ETFs see six-fold surge in Q4 inflows; demand stays firm despite March moderation

Investors poured ₹31,561 crore into gold exchange-traded funds (ETFs) in the March 2026 quarter, marking an almost six-fold jump from ₹5,654 crore a year earlier.

Sequentially, inflows rose 36% to ₹23,132 crore, reflecting sustained investor interest through the quarter even as monthly momentum eased towards the end.

In March, gold ETFs recorded net inflows of ₹2,266 crore, down from ₹5,255 crore in February and ₹24,040 crore in January. The moderation follows an exceptionally strong start to the year, when elevated risk aversion and rising gold prices drove sharp allocations.

Data from the Association of Mutual Funds in India (AMFI) shows that despite the sequential slowdown, investor appetite for gold-backed products remained intact, supported by ongoing macroeconomic uncertainty.

Nehal Meshram, Senior Analyst, Morningstar Investment Research India, said January inflows were unusually elevated, driven by heightened risk aversion, portfolio rebalancing, and strong momentum in gold prices.

“This made the following months appear relatively subdued. However, continued positive inflows in March indicate that gold retains its appeal as a diversification tool amid uncertainty and macro volatility,” she noted.

Echoing a similar view, Umesh Sharma, CIO-Debt, The Wealth Company Mutual Fund, said inflows slowed in March partly because relative valuations began favouring equities over gold, prompting some investors to recalibrate allocations.

The strong inflows lifted assets under management (AUM) of gold ETFs to ₹1.71 lakh crore by the end of March 2026, nearly three times higher than ₹58,888 crore a year ago.

Investor participation also expanded significantly, with folio numbers rising to 1.24 crore from 69.69 lakh over the same period, indicating a growing shift towards financialised gold investments.

Analysts said gold ETFs continue to draw interest due to their liquidity, transparency, and ease of access compared to holding physical gold. They added that the trend underscores gold’s dual role in portfolios—as a tactical hedge during uncertain periods and a strategic long-term allocation.

Gold ETFs track domestic gold prices and invest in high-purity bullion, offering investors exposure to the metal in dematerialised form while combining the flexibility of equities with the simplicity of gold investments.

-With PTI inputs

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