Festive shine: Gold ETF inflows hit 16-month excessive at ₹1,028 crore in August

New Delhi, Gold exchange-traded funds (ETFs) attracted Rs 1,028 crore in August, making it the best influx in 16 months, amid continued hikes in rates of interest within the US, which led to a slowing down in progress charge there. With this, the year-to-date influx within the class has reached greater than Rs 1,400 crore, information with the Affiliation of Mutual Funds in India (Amfi) confirmed.

Aside from influx, the asset base of Gold ETFs and buyers’ account or folio numbers elevated within the interval beneath assessment.

Based on information, gold-linked ETFs have seen an influx of Rs 1,028 crore in August. This got here following an influx of Rs 456 crore within the phase in July.

Earlier than that, Gold ETF noticed influx to the tune of Rs 298 crore through the April-June interval after three quarters of consecutive outflow. The class noticed a withdrawal of Rs 1,243 crore within the March quarter, Rs 320 crore within the December quarter, and Rs 165 crore within the September quarter.

The month of August witnessed the best month-to-month influx into Gold ETFs since April 2022 when the class attracted Rs 1,100 crore on the again of the Russia-Ukraine conflict.

Flows into Gold ETFs have been subdued since then because the US Federal Reserve launched into its tightening cycle.

“As the tip to the Fed’s tightening cycle is now coming shut, prospects for gold are trying good. The steel has held its floor regardless of US yields and the US greenback being on an upward trajectory currently. A possible US recession, central financial institution gold shopping for, geopolitical tensions, rising US debt ranges are all supporting curiosity within the treasured steel,” Ghazal Jain, Fund Supervisor – Different Investments at Quantum Mutual Fund, stated.

Furthermore, gold costs in current occasions have come off from its all-time excessive ranges, thereby offering some shopping for alternative, significantly after a pointy rally it witnessed since March this 12 months, Melvyn Santarita, Analyst – Supervisor Analysis at Morningstar India, stated.

“With the continued hike in rates of interest within the US, inflation nonetheless increased than expectations, and progress charge slowing down, the enchantment of gold as a protected haven and hedge towards inflation is predicted to proceed,” Santarita added.

Gold, with its superlative efficiency over the previous couple of years, has attracted vital investor curiosity and the constant surge in its folio numbers is a sworn statement of the identical.

Investor accounts in Gold ETFs climbed by 20,500 folios to 47.95 lakh in August from 47.75 lakh within the previous month. This reveals that buyers have grow to be extra inclined towards gold-related funds.

Additional, the property beneath administration of Gold ETFs surged by over 4 per cent to Rs 24,318 crore in August from Rs 23,330 crore within the previous month.

Gold ETFs, which observe the home bodily gold worth, are passive funding devices which might be based mostly on gold costs and put money into gold bullion. Briefly, Gold ETFs are models representing bodily gold which can be in paper or dematerialised type.

One Gold ETF unit is the same as 1 gram of gold and is backed by bodily gold of very excessive purity. They mix the flexibleness of inventory investments and the simplicity of gold investments.