“The rally, which began in April 2025, has been supported by expectations of a potential U.S. Federal Reserve rate cut, heightened geopolitical tensions, robust investment demand, and continued central bank accumulation. The most recent $250–$300 upswing was largely driven by increased safe-haven buying amid concerns over the ongoing U.S. government shutdown,” said Satish Dondapati, Fund Manager – ETF, Kotak Mutual Fund.
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The fund manager at Kotak Mutual Fund also added that subsequently, gold prices witnessed some retracement as investors engaged in profit-taking following an extended rally of nearly 25% within two months and this correction was further accentuated by a rise in U.S. bond yields and a firmer U.S. dollar.
Gold ETFs performance tracker
In the last three months, gold ETFs have offered an average return of 23% with UTI Gold ETF offering the highest return of 27.19% in the last three months followed by LIC MF Gold ETF which gave 23.40% in the same period.
Kotak Gold ETF posted a return of 22.96% in the last three months whereas Nippon India ETF Gold BeES, the largest and oldest gold ETF, gave a return of 22.94% in the same time period. Tata Gold ETF offered the lowest return of 22.25% in the mentioned time period.According to a report by ETMarkets, Gold and silver prices declined in early trade on Friday, October 24. On the Multi Commodity Exchange (MCX), gold futures for December delivery slipped by Rs 533 or 0.43% to trade at Rs 1,23,571 per 10 grams. Silver futures were down Rs 1,386 or 0.93%, quoting at Rs 1,47,126 per kilogram. The movement came amid mixed global cues and cautious sentiment ahead of key economic indicators, with traders opting to pare gains at elevated levels.
Recent fall
In the last two weeks, the performance by gold ETFs was subdued as these funds gave an average return of 0.70% with UTI Gold ETF offering the highest return of 4.26% and Aditya Birla Sun Life Gold ETF gave the lowest of around 0.12% in the last two weeks.
Gold ETFs in the last one week witnessed a fall upto 7% as on an average these funds gave a negative return of 6.11%. Tata Gold ETF lost the most of around 6.81% in the last one week. UTI Gold ETF lost the lowest of around 2.64% in the past week.
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Nevertheless, the decline appears to reflect short-term volatility rather than a fundamental reversal in trend and in the near term, gold is likely to remain volatile due to uncertainty surrounding global trade policies and uncertainty over the U.S. shutdown, Satish Dondapati adds.
“However, in the medium to long term, the key structural drivers for gold remain intact — including elevated global debt levels, persistent central bank demand, and ongoing geopolitical and inflationary pressures,” Satish Dondapati said.
Billionaire investor Ray Dalio warned on social media platform X on Friday that U.S. sanctions on Russia’s oil giants could trigger a global financial ripple, weakening the dollar and boosting gold.
Dalio emphasized gold’s enduring role as a non-fiat currency, stating it “remains securely held and universally accepted,” and historically appreciates during periods of currency stress and low interest rates. Investors are closely watching gold as a hedge, particularly with expectations of U.S. Federal Reserve rate cuts later this month
What are investors expected to do?
The fund manager at Kotak Mutual Fund recommends that investors should exercise caution in making lump-sum allocations to gold at current levels and instead, should take a phased investment approach through SIPs or STPs in gold ETFs or gold mutual funds, aligned with individual risk tolerance and asset allocation frameworks.
Gold ETFs are exchange-traded funds that track the price of physical gold. Each unit of a Gold ETF is backed by a specific quantity of gold, usually equivalent to one gram. They are listed on stock exchanges, and you need a demat and trading account to buy and sell them.
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