Profit-Taking Impact
Net inflow in gold ETF at 8-month low Dec, silver dn 49% on month, says AMFI
This story was originally published at 13:10 IST on 10 January 2025
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By Ashutosh Pati
MUMBAI – Net inflows into gold exchange-traded funds fell to an eight-month low in December as investors resorted to profit-taking, experts said. Net inflows into silver ETFs also declined in December. Rise in the dollar index dampened demand for gold and led to lower inflows, said Satish Dondapati, ETF fund manager at Kotak Asset Management Co. "Historically, year-end often sees subdued activity in gold," Dondapati added.
Net flows into gold ETFs in December were INR 6.40 billion, down 49% from INR 12.57 billion in November, according to data released by the Association of Mutual Funds in India on Thursday. However, on a yearly basis, the net inflows in December were over seven times higher. In December 2023, the net inflows into gold ETFs were INR 883.1 million. The gross inflows into gold ETFs in December were INR 8.85 billion, lower than INR 14.78 billion in November.
In the last three years, inflows into gold ETFs in December have fallen by 74%, 41%, and 51% month-on-month, respectively.
"Due to the strength in the dollar index and the surge in US bond yields, some profit booking was seen in gold," said Manoj Jain, director of Prithvi Finmart. "Going ahead, January should be a stable month for gold. We are seeing a revival in gold prices in the first week of 2025 as prices are approaching $2,700 per ounce in the international market," Jain added.
At the time of writing, the most-traded February gold contract on the COMEX was at $2,698.3 per ounce, up 0.3% from Thursday's close.
The value of net assets under management of 18 gold ETFs at the end of December was INR 445.95 billion, 0.8% higher than INR 442.45 billion in November, the AMFI data showed.
As of Dec. 31, the number of folios in gold ETFs was 6.4 million, up from 6.3 million the previous month. Redemption and repurchase for the month was INR 2.45 billion, slightly higher than INR 2.22 billion in November.
Net inflows into silver ETFs fell around 49% to INR 4.76 billion in December from INR 9.29 billion in November. The gross inflows in December were INR 6.11 billion, against INR 10.49 billion in the previous month.
The net assets under management of 12 silver ETFs at the end of December were INR 123.17 billion, slightly lower than from INR 123.34 billion in November. The number of folios under silver ETFs as on Dec. 31 was 621,639 against 582,990 in the previous month. Redemption and repurchase in December was INR 1.35 billion, up from INR 1.19 billion in November, per AMFI data.
There is positive momentum in silver prices because of hopes of fresh stimulus from China once US president-elect Donald Trump takes office, Jain said. In his New Year's Day speech, China's President Xi Jinping pledged more proactive economic policies to support growth in 2025. End
US$1 = INR 85.89
Edited by Ashish Shirke
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