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Informist, Wednesday, Mar. 12, 2025

By Ashutosh Pati

MUMBAI – Gold exchange-traded funds witnessed net inflows for the tenth consecutive month in February, doubling on year to INR 19.80 billion, as concerns about a global tariff war increased the appeal of the safe-haven asset, analysts said. Net inflows, however, fell 47% on month as investors resorted to profit-taking, analysts said. 

The value of net assets under management of 19 gold ETFs at the end of February rose 7% on month to INR 556.77 billion, according to data released by the Association of Mutual Funds in India Wednesday. The gross inflows into gold ETFs in February were INR 27.60 billion, lower than INR 38.81 billion in January. As of Feb. 28, the number of folios in gold ETFs was 6.8 million, up from 6.5 million in the previous month. The redemptions and repurchases for the month were INR 7.8 billion in February, higher than INR 1.3 billion in January.

There may be another reason for the sequential decline in inflows into gold ETFs, market participants said. "Due to the steep fall in the domestic equity market, investors may have cut their positions in gold to fulfil their mark to market losses," said Manoj Jain, director of Prithvi Finmart.

Prices of the yellow metal hit a lifetime high of $2,957.9 an ounce on Feb. 24 on COMEX and INR 86,592 per 10 gram on the Multi Commodity Exchange on Feb. 19.

Net inflows into silver ETFs more than doubled on month in February due to rising prices of silver and industrial demand. Net inflows into silver ETFs rose to INR 4.40 billion in February from INR 2.17 billion in January. The gross inflows in February were at INR 7.07 billion, against INR 3.67 billion in the previous month.

"The gold to silver ratio suggests that there is a possibility of silver outperforming gold in the coming months, which has led to higher inflows into silver ETFs", Jain said. "Silver prices are going up and that is why investors are betting on silver rather than gold," Jain added.

The net assets under management of 12 silver ETFs at the end of February were INR 139.94 billion, up from INR 135.65 billion at the end of January. The number of folios under silver ETFs as on Feb. 28 was 639,430, against 619,844 in the previous month. The redemption and repurchase was INR 2.67 billion, up from INR 1.5 billion in January, per the data.  End

US$1 = INR 87.21

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Saji George Titus

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