After strong inflows in January, momentum tapered in subsequent months, indicating a gradual cooling in incremental allocations.
Gold ETFs witnessed an outflow of ₹725 crore in May, breaking a 13-month streak of positive inflows, due to government appeals against purchasing the yellow metal and several asset management companies halting fresh inflows into these funds.
This was the first outflow since April 2025, when the Gold ETF saw a withdrawal of ₹5.82 crore.
Overall, Gold ETFs (Exchange-Traded Funds) have attracted more than ₹70,000 crore since May 2025.
According to data disclosed by the Association of Mutual Funds in India (AMFI) on Wednesday, Gold ETFs witnessed an outflow of ₹725 crore in May, against an inflow of ₹3,040 crore in April. The inflow stood at ₹2,266 crore in March, ₹5,255 crore in February and ₹24,040 crore in January.
After strong inflows in January, momentum tapered in subsequent months, indicating a gradual cooling in incremental allocations.
The reversal appears to have been driven by a combination of profit booking following the earlier rally in gold prices and a shift in investor risk appetite, with some rotation away from safe-haven assets.
“With gold prices touching record highs, the government’s request not to purchase gold, and some AMCs stopping inflows into ETFs, investors seem to be taking a more practical view,” said Feroze Azeez, Joint CEO, Anand Rathi Wealth.
After a sharp rally, future returns may not look as attractive as they did over the past year. Some investors may also be booking profits and reallocating money towards other opportunities, especially equities that have corrected significantly, he added.
Nehal Meshram, Senior Analyst, Morningstar Investment Research India, said the rising opportunity cost of holding gold, particularly in an environment of relatively attractive yields in fixed income, may have contributed to the pullback. The pattern of flows also suggests that a significant portion of earlier allocations was tactical in nature, making them more sensitive to price movements and short-term macro cues.
Despite the sequential decline, assets under management (AUM) of gold ETFs rose to ₹1,84,571 crore at the end of May, from ₹1,78,110 crore in April-end.
Gold ETFs, which track the domestic physical gold price, are passive investment instruments that are based on gold prices and invest in gold bullion. In short, gold ETFs are units representing physical gold, which may be in paper or dematerialised form.
One gold ETF unit is equal to 1 gram of gold and is backed by physical gold of very high purity. They combine the flexibility of stock investments and the simplicity of gold investments.
Published on June 10, 2026