Gold is considered a safe haven asset which investors move to during global uncertainties. This time, the uncertainties were triggered by the tariff war the U.S. President Donald Trump waged, making global markets shaky.
| Photo Credit: DAVID GRAY
Indian investors had a tumultuous year as the benchmark Nifty returns dipped to negative with overall market turnover hitting a low in December 2025. Howeve, investor interest in gold exchange traded funds (ETFs) increased this year.
Exchange Traded Funds (ETF) are those that track the performance of an underlying asset. If an investor buys a Nifty 50 ETF, they would be purchasing units of a portfolio that tracks the performance of the index. A gold ETF tracks the performance of bullion gold.
The net inflows into gold ETFs increased to ₹25,566 crore between January and November 2025, nearly thrice of what it was in the same period of 2024, going by data from Centre for Monitoring Indian Economy(CMIE). The share of net inflows into Gold ETFs in all open-ended schemes increased to 3.2% between January and November 2025. This number was less than 1% in the corresponding periods since 2021-22 , making this the best year for the gold ETFs yet. The net inflow into all open- ended schemes fell 4.8% to ₹7.9 lakh crore upto November 2025. This measure had increased 1.5 fold as of November 2024, which clearly shows that gold ETFs increased in popularity while the general mutual fund investment interest was tempered.
A lot of this has to do with the Indian investors’ behaviour, global factors and local market conditions.
Gold has always been a regular purchase as Indian households expect the prices to increase. Gold prices increased 61% to ₹3.8 lakh a kg in November 2025 from about ₹2.4 lakh a kg making it a historical run. At the same time, Indian stocks were giving sub-optimal returns, were expensive and many of the much hyped stocks that listed in 2024 were trading below the price they debuted.
Gold is considered a safe haven asset which investors move to during global uncertainties. This time, the uncertainties were triggered by the tariff war the U.S. President Donald Trump waged, making global markets shaky.
Moreover, central banks all over the world have continuously increased their gold reserves to diversify their holdings and reduce dependence on the dollar, which in effect reduces volatility that could flow from decisions taken under the Trump Administration.
Gold ETFs are simple, cheap and secure way to invest in gold. A unit of gold ETF would cost about ₹140 to ₹150 , which is inexpensive compared to buying gold in grams. Making-charges or such charges that would reduce the actual purchased value of gold do not exist in ETFs making them an easy purchase.
Meanwhile, experts warn that these returns may not sustain in the coming year as the run so far has been historical. “Gold has run up significantly, so next year, we expect the returns to moderate.” said Siddharth Srivastava Head of ETF Products & Fund Manager, Mirae Asset Investment Managers (India), adding that a rally as high as 60% in a year cannot be expected to go on forever. However, in the long term, gold ETFs will continue to be a diversifying investment and will find investor interest, he said.
Some even go as far as calling the increasing interest in Gold ETF a “FOMO,” (Fear Of Missing Out). “ We note that the FOMO from the sharp increase in gold prices appears to be influencing investment demand in India in recent months as well,’ observed Kotak Institutional Research in a recent report.
A lot of the outlook for the yellow metal-backed investment avenue, however depends hugely on answering crucial questions like whether Indian equities will continue to give suboptimal returns, will the dollar appreciate, and will central banks continue to buy gold at the same quantum.
Published – December 26, 2025 09:28 pm IST
