Gold ETF Inflows Plummet Amid Price Volatility
Gold exchange-traded funds (ETFs) saw a significant decline in inflows in July, down nearly 55% from June to ₹1,559 crore, according to data released by the Association of Mutual Funds in India (Amfi). This comes after an extended rally that pushed gold ETF assets under management to record highs, followed by a sharp market correction that prompted retail investors to pause fresh allocations.
Navneet Damani, head of research for commodities and currency at Motilal Oswal Financial Services, attributed the decline to profit-booking and leverage. 'Whenever something is moving, investors try to jump in to chase that. And when prices start to correct, the traction or the kind of flows which come into any kind of segment starts to pause,' Damani explained.
Vikram Dhawan, head commodities and fund manager at Nippon India Mutual Fund, noted that profit-taking and the unwinding of speculative positions contributed to the decline. 'What happened initially in 2026 was profit-taking, which snowballed into huge volatility, partly because a lot of leverage bets had been taken in gold and silver in overseas markets,' Dhawan said.
Despite the temporary slowdown in retail flows, market experts maintain a constructive long-term outlook for precious metals. Damani expects a V-shaped recovery in international gold prices, targeting $5,500 to $5,700 per ounce over the next 12 to 24 months.