Despite the February slowdown, gold ETF inflows this year have reached $3.06 billion, pushing total assets under management close to $20 billion, according to the World Gold Council.
The inflows into gold exchange-traded funds plunged 77 per cent last month to $565 million, compared with a record high of $2.5 billion logged in January, as the sudden sharp fall in gold prices rattled investor sentiment.
Gold prices have been rallying over the last few months on the back of geopolitical developments and peaked after the US imposed high trade tariffs, rattling the world.
Strong yearly inflows
Gold ETF inflows so far this year have surged to $3.06 billion, pushing assets under management close to $20 billion, according to the World Gold Council data. This compares with inflows of $4.69 billion last year, $1.29 billion in 2024, $310 million in 2023, and just $33 million in 2022.
Profit-booking impact
Redemptions from some of the larger funds earlier in the month were likely driven by profit-taking as the gold price pulled back, but these were gradually offset as the month progressed, underscoring sustained interest in gold ETFs, the Council said.
SEBI rule boost
The growing interest was further supported by the SEBI’s recent overhaul of the mutual fund scheme-categorisation framework, which now allows equity mutual fund schemes to invest the residual portion of their assets in gold and silver ETFs, it said.
Shweta Rajani, Mutual Fund Head, Anand Rathi Wealth, said the gold ETF inflows hit a record high in January at Rs 24,040 crore, which was higher than ₹24,028 recorded by all equity MF schemes put together in a single month.
The investments were on the back of a 24 per cent surge in gold prices to an all-time high of ₹1.75 lakh per 10 grams in January, she said.
However, the mood changed quickly towards the end of January when gold prices fell about 9 per cent on a single day after hitting record highs. Such sudden moves often prompt investors to pull out their money due to profit-taking, making them cautious, especially those who entered near the peak, said Rajani.
Investors should avoid the herd mentality, especially when gold prices are volatile and remain anchored to their long-term goals and asset allocation. The combined allocation to gold and debt should not exceed 20 per cent, and gold exposure makes more sense when aligned with long-term objectives such as wealth preservation or gradual accumulation for future needs, she added.
Cyclical slowdown view
Dr Renisha Chainani, Head of Research, Augmont, said while reporting the inflows in US dollar terms can also slightly amplify the slowdown due to currency fluctuations, the bigger factor was investor behaviour after a sharp rally.
The moderation in February appears cyclical and tactical, while the broader investment demand for gold ETFs in India remains intact, he said.
Published on March 6, 2026
