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Informist, Friday, Oct. 10, 2025

 

By J. Navya Sruthi

 

MUMBAI – Investors have been dazzled by the massive returns from gold and silver in the last few days, as these metals recorded a steady rise in prices and kept breaking their own record levels. The fear of missing out on higher returns amid record high prices drew all-time high net inflows into these bullion metals' exchange-traded funds in September, analysts said. While inflows into these funds are expected to continue moving forward, a similar surge in inflows is unlikely, they added.   

 

Both gold and silver prices have rallied more than 40% so far this year, which led to "FOMO" (fear of missing out) in investors and boosted net inflows into gold and silver exchange-traded funds, Manoj Kumar Jain, director at Prithvi Finmart said. Both the metals hit multiple record highs in September on the back of global uncertainties and geopolitical tensions.

 

Gold prices on the Multi Commodity Exchange of India rose to a record high of INR 123,677 per 10 grams on Thursday due to global uncertainties and yielded over 61% so far in 2025. Silver prices on the domestic exchange rose to an all-time high of INR 153,388 per kilogram, tracking the contracts on COMEX. On the global exchange, silver prices breached the $50-per-ounce mark to hit a record high almost after 14 years. 

 

This spur in prices pushed the net inflows in both silver and gold exchange-traded funds to an all-time high during September. According to data released by the Association of Mutual Funds in India Friday, net inflows in 22 gold exchange-traded funds were up a whopping 282% on month and 578% on year at INR 83.63 billion in September. Similarly, the net inflows in 16 silver exchange-traded funds rose to an all-time high of INR 53.42 billion, up nearly 204% on month and 727% on year.

 

According to the Association's data, the assets under management into gold ETFs rose over 24% on month to INR 901.36 billion as of Sept. 30. On a yearly basis, assets under management rose 126% from INR 398.24 billion as of Sept. 30, 2024. This massive increase in assets under management is mainly due to the mark-to-market gains, said the association's Chief Venkat N. Chalasani. The assets under management into silver ETFs rose nearly 39% on month and 236% on year to INR 364.69 billion. 

 

FURTHER UPSIDE?

Moving forward, flows into both gold and silver exchange-traded funds are likely to continue as prices of these bullion metals are seen rising to new record highs, Jain said. The uncertainties in the US amid the ongoing government shutdown, continuous buying of gold and silver by central banks, and persisting geopolitical tensions are likely to support prices of both precious metals, he added. 

Although net inflows into bullion funds would continue, analysts do not see another surge of inflows into these exchange-traded funds. Manav Modi, assistant vice president at Motilal Oswal Financial Services Ltd., said there will be a slight pause in inflows into silver exchange-traded funds as these are currently on premium. But inflows into gold exchange-traded funds will continue, Modi said. 

 

Shubham Jha, investment manager on smallcase and senior research analyst at WealthTrust Capital, said the returns on commodities have already been pretty high in the last three months, and "we think that there can't be a huge upside as of what happened in the last three months. But, 10-15% upside (in prices) is still possible (from current levels)." He added that an investment of a lumpsum amount into gold and silver is not a "good option".

 

Both Motilal's Modi and Prithvi Finmart's Jain see COMEX silver prices rising to $55-$56 per ounce on the COMEX by the end of 2025. Modi sees COMEX gold prices at $4,200-$4,300 per ounce by the end of this year and Jain sees it at $4,240 per ounce. According to Jain, MCX silver prices are likely to rise further to INR 158,000-INR 160,000 per kilogram and gold to INR 128,000 per 10 grams. 

TOP FUNDS

In September, Motilal Oswal Gold and Silver ETFs Fund of Funds – Direct Plan gave the highest monthly return of 17.08%. Edelweiss Gold and Silver ETFs Fund of Funds – Direct Plan, Quantum Gold, ICICI Pru Regular Gold Savings Fund of Funds – Direct Plan, Invesco India Gold ETF, and SBI Gold – Direct Plan were among the top 10 in terms of returns, as per data from Value Research. On the other hand, Kotak Gold – Direct Plan gave the lowest return of 11.84%, data from Value Research showed.

 

Meanwhile, the SBI Silver ETF Fund of Fund – Direct Plan gave the highest monthly return of 21.11% in September. Zerodha Silver ETF Fund of Funds – Direct Plan, ASBL Silver ETF Fund of Funds – Direct Plan, Motilal Oswal Silver ETF Fund of Funds – Direct Plan, and UTI Silver ETF Fund of Funds – Direct Plan were among the top 10 in terms of returns, as per data from Value Research. Tata Silver ETF gave the lowest return of 18.85% in September, the data showed.

 

In fact, the Kotak Mahindra Mutual Fund has announced a temporary suspension of lumpsum and switch-in investments in the Kotak Silver ETF Fund of Funds, effective from Friday, due to a significant premium on domestic silver compared to global prices, driven by the scarcity of the white metal in India. According to Value Research, Kotak Silver ETF Fund of Funds – Direct Plan gave a return of 19.77% in September.   

 

Modi said this scarcity of the white metal in India is mainly due to a surge in demand amid the ongoing festive season. However, this disparity in prices may be eased off after Diwali, he said.  End

 

US$1 = INR 88.68

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

 

Edited by Tanima Banerjee

 

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