Investment Tips: India Witnesses Surge in Gold ETF Investments, Know Factors Affecting This Major Development

Investment Tips: Demand for Gold Exchange Traded Funds (ETFs) in India has continuously increased, despite a fall in global interest in gold ETFs. In November 2024, investments in Gold ETFs in India totaled Rs 1,484 Cr, the eleventh consecutive month of record inflows. A major reason for this spike is the lack of fresh Gold Bond issuances this year, which has turned investor interest to Gold ETFs. Furthermore, the global drop in gold ETF investments—down $2.1 billion or 28.6 tons in November—has underlined India's growing preference for gold as an investment. Notably, China saw its highest loss in 20 months, with a $145 million drop in gold ETF investments.

Gold ETF in India

Several reasons contribute to India’s growing demand for gold ETFs. The strengthening of the US dollar has resulted in an increase in gold prices, both globally and domestically, enticing investors seeking a safer investment option. On a major note, the Reserve Bank of India (RBI) purchased 27 tons of gold in October 2024, increasing its total acquisitions for the year to 77 tons, five times the previous year. This considerable interest from the RBI indicates a healthy gold market in India. While Gold ETFs sound promising, potential investors should speak with their financial experts, keeping in mind that these assets have inherent risks and are not always completely safe.