March Sees Significant Drop in Gold ETF Inflows Amid Middle East Tensions
Synopsis
In March, gold ETFs in India faced a sharp decline in inflows, dropping to Rs 2,266 crore, significantly less than February's Rs 5,255 crore. This downturn is largely due to geopolitical tensions, particularly between the US and Iran. Despite this, total assets under management remain strong.
Key Takeaways
Gold ETFs in India saw inflows drop to Rs 2,266 crore in March.
Geopolitical tensions, particularly between the US and Iran , affected investor sentiment.
Despite lower inflows, AUM for gold ETFs remains strong at Rs 1.71 lakh crore .
Gold prices fell approximately 11% in the domestic market in March.
Globally, gold ETFs recorded outflows of $12 billion , the largest on record.
Mumbai, April 10 (NationPress) Gold exchange-traded funds (ETFs) in India experienced a notable decrease in inflows during March, with net inflows plummeting to Rs 2,266 crore for the month, as per data from the Association of Mutual Funds in India (AMFI) released on Friday.
This represents a substantial drop compared to February, when investors invested a net Rs 5,255 crore into these funds.
The decline is attributed to geopolitical instability, particularly tensions involving the United States and Iran, which negatively impacted investor sentiment.
Gold ETFs, which mirror the price of physical gold, are viewed as a practical and tax-efficient investment since they eliminate the challenges associated with storing and securing physical gold.
Currently, there are 25 such investment schemes accessible to Indian investors. The decrease in inflows coincided with a sharp correction in gold prices.
In the domestic market, gold prices saw an approximate 11% decline in March, paralleling the downturn in the benchmark Nifty index during that time.
This price drop seems to have curbed investor enthusiasm, despite gold's reputation as a safe-haven asset in uncertain times.
Even with the recent slowdown in inflows, the total assets under management (AUM) for gold ETFs remained strong.
As of March 31, the AUM was reported at Rs 1.71 lakh crore, reflecting earlier gains in bullion prices that contributed to overall asset growth.
On a global scale, the trend was even more drastic. According to data from the World Gold Council, gold ETFs faced outflows of $12 billion in March, marking the largest monthly withdrawal on record.
This significant outflow disrupted what was expected to be a robust quarter for global gold ETF inflows.
Nonetheless, on a wider perspective, gold ETFs worldwide have recorded a seventh consecutive quarter of net inflows, as indicated in the report.
Point of View
The sharp drop in March raises questions about future investment strategies in the gold sector. Investors must navigate these complexities while considering gold's historical role as a safe haven.
NationPress
12 Jul 2026
Frequently Asked Questions
What caused the decline in gold ETF inflows in March?
The decline in gold ETF inflows in March is primarily attributed to geopolitical uncertainties, especially tensions between the United States and Iran.
How much did gold ETF inflows drop in March?
Gold ETF inflows more than halved to Rs 2,266 crore in March, down from Rs 5,255 crore in February.
What is the current total assets under management (AUM) for gold ETFs in India?
As of March 31, the total assets under management for gold ETFs in India stood at Rs 1.71 lakh crore.
How do gold ETFs work?
Gold ETFs track the price of physical gold and provide a convenient investment option without the need for physical storage.
What was the global trend for gold ETFs in March?
Globally, gold ETFs faced outflows of $12 billion in March, marking the largest monthly withdrawal on record.
