Gold ETF Inflows Soar 66% Amid Geopolitical Tensions and Rate Outlook Shift
Gold exchange-traded funds (ETFs) saw a significant surge in net inflows of Rs 2,596.70 crore in August 2026, marking a 66.59% increase from July's Rs 1,558.75 crore. This uptick in demand can be attributed to various factors, including escalating geopolitical tensions and changes in interest rate outlook.
The US Federal Reserve's benchmark rate between 3.50 percent and 3.75 percent, combined with low probability of rate cuts, has made gold investments more lucrative compared to fixed income instruments. This shift in monetary policy has prompted investors to reallocate their portfolios, seeking a hedge against currency volatility and macroeconomic uncertainty.
The robust price performance of the yellow metal on the Multi Commodity Exchange (MCX) also contributed to the surge in demand for Gold ETFs. Domestic gold futures rallied by over 13% in August 2026 alone, with prices surging past Rs 1,60,000 per 10 grams and touching intraday highs above Rs 1,63,000 per 10 grams.