Gold ETF Inflows Plunge Amid Market Correction

Gold exchange-traded fund (ETF) inflows plummeted by nearly 55% in July, dipping to Rs.1,559 crore from June's Rs.3,443 crore, according to data released by the Association of Mutual Funds in India (Amfi). This decline comes after a prolonged rally that pushed gold ETF assets under management to record highs.

The correction was triggered by a sharp market downturn, down nearly 30% and 50% from their peak levels respectively. Navneet Damani, head of research for commodities and currency at Motilal Oswal Financial Services, attributed the decline in flows to retail investors' cautious approach after prices retreated.

Vikram Dhawan, head commodities and fund manager at Nippon India Mutual Fund, pointed out that profit-taking and the unwinding of speculative positions were key factors behind the pullback. Higher oil prices and rising global bond yields added macro headwinds, driving tactical capital out.