Total assets under management (AUM) for Indian gold ETFs climbed to Rs 374 billion (~USD 4.4 billion) by the end of August, marking an 8 percent month-on-month increase and a 54 percent year-on-year rise. So far in 2024, net inflows into Indian gold ETFs have reached Rs 61 billion (~USD 735 million), a significant increase from Rs 15 billion during the same period last year. These ETFs have collectively added 9.5 tons of gold this year, bringing total gold holdings to 51.8 tons, a 29 per cent year-on-year increase
New Delhi: Gold prices are witnessing a strong resurgence in both international and domestic markets, with increased jewelry buying and investment activities expected to persist, according to the latest report from the World Gold Council.
Rural demand, in particular, is showing signs of recovery. With an improved monsoon season and higher crop sowing this year, rural economic conditions are set to strengthen, which is anticipated to drive increased gold purchases, especially during the festive period.
The report highlights that gold prices continued to strengthen in September. International gold prices rose by 2.8 percent, while domestic prices increased by 1.6 percent over the same period. Despite these gains, Indian gold prices remain 2 percent below pre-Union Budget levels due to a 9 percent reduction in import duties announced in July.
Gold saw a strong performance in August, with international prices rising by 3.7 percent and domestic prices up 3.9 percent.
This upward trend was largely driven by expectations of easing interest rates in the U.S., leading to a drop in the U.S. dollar, further supporting gold’s appeal as an investment.
Gold demand in India has remained robust, particularly following an initial surge after the import duty cut. Though demand for jewelry and bars and coins has since stabilized, industry reports suggest buying activity remains stronger than before the duty reduction.
Many purchases that were previously delayed are now materializing, with consumers showing increased interest in heavier jewellery pieces.
Looking ahead, industry participants are closely monitoring the key festive and wedding season, which runs from late August through December. Festive buying has already started strong, and the wedding season is expected to further boost sales.
Indian gold exchange-traded funds (ETFs) have witnessed a surge in investor interest since the import duty cut and changes to long-term capital gains tax for gold ETFs were announced in the Union Budget.
August saw record inflows of Rs 21 billion (~USD 238 million), significantly higher than the average monthly inflows of Rs 8 billion during the first half of 2024, according to data from the Association of Mutual Funds in India (AMFI). Net inflows for the month also reached a record Rs 16 billion (~USD 192 million).
Total assets under management (AUM) for Indian gold ETFs climbed to Rs 374 billion (~USD 4.4 billion) by the end of August, marking an 8 percent month-on-month increase and a 54 percent year-on-year rise.
So far in 2024, net inflows into Indian gold ETFs have reached Rs 61 billion (~USD 735 million), a significant increase from Rs 15 billion during the same period last year.These ETFs have collectively added 9.5 tons of gold this year, bringing total gold holdings to 51.8 tons, a 29 per cent year-on-year increase.
The steady inflows into Indian gold ETFs mirror global trends, driven by strong gold price performance, safe-haven demand, and reduced opportunity costs.
The Reserve Bank of India (RBI) has also continued its gold-buying spree. Data indicates that the central bank acquired 10.3 tons of gold over the six weeks leading up to September 6, bringing its total purchases for the first eight months of the year to 50 tons.
ANI