Gold ETF Inflows Surge 67% as Investors Flock to Safe-Haven Asset

Passive funds in India saw moderate inflows in August, totaling Rs 10,876 crore. This represents a decline of 13 percent from July's inflows of Rs 12,517 crore.

Gold ETFs experienced a significant surge in investor demand, attracting nearly 67 percent more inflows at Rs 2,597 crore compared to the previous month's Rs 1,559 crore. Their assets under management (AUM) rose to Rs 1.91 lakh crore from Rs 1.73 lakh crore.

Equity ETFs saw inflows of Rs 7,237 crore in August, while index funds received Rs 787 crore, a decline of nearly 49 percent from the previous month's Rs 1,537 crore. FoFs recorded an outflow of Rs 72 crore, despite their AUM increasing to Rs 48,548 crore.

Himanshu Srivastava, Principal at Morningstar Investment Research India, attributed the increase in gold ETF flows to renewed investor interest amid macroeconomic and geopolitical uncertainties. He noted that gold prices rallied sharply in August due to broad-based global ETF buying and a weaker US dollar.