India’s Gold ETF Inflows Surpass Equity Funds as Prices Hit Record Highs
Gold ETF inflows in India surpassed equity fund investments in January, highlighting strong investor demand for bullion despite record-high prices.
Indian investors channeled more funds into gold exchange-traded funds than equity mutual funds in January, marking a rare crossover that underscores sustained appetite for bullion even as prices climb to record levels.
According to data released by the Association of Mutual Funds in India, net inflows into gold ETFs surged to a record 240.4 billion rupees ($2.65 billion), narrowly surpassing equity fund inflows of 240.3 billion rupees. The development represents one of the strongest monthly endorsements of gold by domestic investors in recent years.
The shift mirrors a broader global trend. Holdings in gold ETFs worldwide remain close to a more than three-year high, despite a brief pullback in prices last week, as the underlying drivers of the rally — including heightened geopolitical risks and fading confidence in sovereign bonds and currencies — remain firmly in place.
In India, these global dynamics are reinforced by gold’s deep cultural significance and the comparatively weaker performance of local equity markets versus regional peers, further encouraging inflows into bullion-linked investments.
“Investors are reallocating toward gold amid a relatively lackluster year for equities and strong returns delivered by gold over the same period,” said Nirav Karkera, head of research at Fisdom, a wealth management platform. He added that investment demand for gold is likely to remain resilient until there is greater clarity on the macroeconomic outlook.
Equity investments, while overtaken by gold in January, continue to show resilience. Stock funds recorded inflows for a 59th consecutive month, supported by systematic investment plans that keep investors committed to regular contributions, even as the Nifty 50 Index lagged behind regional peers in 2025.
