Gold ETF inflows surge over 6x: What is driving investor interest?, Pg13.

Key Highlights:

• Gold ETFs saw a 578.28% increase in inflows in September 2025, reaching Rs 8,363.13 crore [compared to Rs 1,232.99 crore in September 2024].
• This surge is attributed to rising gold prices, geopolitical tensions, and increased purchases by global central banks.
• The Union Budget 2025-26 provided tax clarity, taxing long-term capital gains on gold ETFs at 12.5%, further incentivizing investment.
• Investors are favoring gold ETFs due to their liquidity, transparency, and cost-effectiveness compared to physical gold.

Detailed Insights:

• Gold ETFs offer investors a way to hold gold in electronic form, eliminating risks associated with physical storage like theft and concerns about purity.
• Macroeconomic concerns and a lacklustre domestic stock market are driving investors towards gold as a safe-haven asset for portfolio diversification and inflation protection.
• Global factors, including expectations of US rate cuts, have contributed to a surge in gold prices, recently exceeding Rs 1,25,000 per 10 gm (999 purity).
• The clarification in the Union Budget 2025-26 regarding taxation of gold ETFs has made them a more attractive investment option for those seeking tax-efficient exposure to gold.
• Analysts anticipate continued inflows into gold ETFs, supported by factors such as a weak US dollar, ongoing geopolitical tensions, and tariff uncertainties.

Key Concepts Involved:

• Gold ETF: Exchange-traded funds with gold as the underlying asset, allowing investors to hold gold in electronic form.
• Safe-haven Asset: An investment that is expected to retain or increase in value during times of market turbulence.
• Long-term Capital Gains: Profits from the sale of assets held for more than a specified period, often subject to a lower tax rate.