Gold ETFs See Mixed Inflows Amid High Prices and Tariff Concerns

In July, inflows into Gold Exchange Traded Funds (ETFs) saw a 40% decline, dropping to Rs 1,256 crore. This dip is attributed to anxieties about elevated gold prices and ongoing tariff discussions. Nonetheless, July marks the third consecutive month of positive inflows, indicating a sustained interest in gold investments.

Santosh Joseph, CEO of Germinate Investor Services, mentioned that gold continues to be a challenging investment for investors to navigate, despite its robust performance over the past two years. Investors are hesitant to allocate more to gold due to its high prices, despite viewing it as a hedge.

According to the Association of Mutual Funds in India's data, Gold ETFs have consistently attracted investors, with accumulative inflows exceeding Rs 9,277 crore from January to July. These funds are viewed as strategic allocations for preserving wealth and countering risk assets, with investor interest bolstered by central bank buying trends and geopolitical risks.

(With inputs from agencies.)