India Sees $850 Million Inflows into Gold ETFs in October, Second Highest in Asia

India’s Gold ETFs Attract $850 Million in October, Second Highest in Asia Amid Strong Investor Demand

India’s gold exchange-traded funds (Gold ETFs) continued their robust rally in 2025, recording $850 million in net inflows during October, according to data released by the World Gold Council (WGC). The inflow marked the second-highest monthly inflow in Asia, reflecting growing investor appetite for gold-backed investments amid global economic uncertainty and market volatility.

Although October’s inflows were 6% lower than September’s $911 million, it still marked the fifth consecutive month of positive fund flows into Indian gold ETFs. Except for March and May, every month in 2025 has witnessed strong interest from investors seeking portfolio diversification through gold investments.

Record-Breaking Year for India’s Gold ETFs

Cumulative gold ETF inflows in India have reached a record $3.05 billion so far in 2025 — the highest ever in a single year. This strong momentum has pushed total assets under management (AUM) in Indian gold ETFs to $11.3 billion, a significant jump from $1.29 billion in 2024, $310 million in 2023, and a mere $33 million in 2022.

The sustained surge underscores the increasing confidence of retail and institutional investors in gold as a hedge against inflation, geopolitical risks, and market uncertainty. Experts believe the trend reflects a broader shift toward regulated gold-backed products, which offer transparency, liquidity, and price efficiency compared to traditional physical gold.

“Investors are increasingly viewing gold ETFs as a convenient and secure vehicle for exposure to gold prices without the logistical and purity-related concerns of physical ownership,” a senior market strategist at WGC said.

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India Ranks Third Globally in Gold ETF Inflows

On the global leaderboard, India ranked third in October 2025 in terms of gold ETF inflows. The United States led with $6.33 billion, followed by China with $4.51 billion. Japan stood fourth at $499.5 million, while France recorded inflows worth $312 million.

In contrast, major European markets saw notable outflows — the United Kingdom recorded $3.5 billion in redemptions, Germany saw $1.17 billion in withdrawals, and Italy registered $185 million in outflows.

Overall, global gold ETF inflows totaled $8.2 billion in October, placing 2025 on track to become one of the strongest years on record for gold-backed investment products.

Global Gold AUM Crosses $500 Billion Mark

The total global assets under management in gold ETFs rose 6% month-on-month to reach $503 billion by the end of October. In terms of physical holdings, total global ETF gold reserves stood at 3,893 tonnes, up 1% compared to the previous month.

The sharp rise in assets has been fueled by increased demand from institutional investors seeking safe-haven exposure amid ongoing geopolitical tensions, slowing economic growth, and volatility in equity and bond markets.

Gold prices hit their 50th all-time high of 2025 on October 20, before correcting by 5% the next day as traders booked profits. Despite this decline, US-listed gold ETFs still attracted $334 million in inflows on October 21. However, profit-taking led to $117 million in outflows later in the week, followed by an additional $1 billion by month-end.

What’s Driving the Surge in Gold ETF Investments in India

Analysts attribute India’s gold ETF boom to several key factors:

1. Market Volatility and FII Outflows: Persistent foreign selling in equities and currency fluctuations have encouraged investors to seek the stability of gold.

2. Inflation Hedge: With global inflation concerns still hovering, gold remains a proven hedge against declining purchasing power.

3. Ease of Investment: Online platforms and regulated gold ETFs have simplified participation for retail investors.

4. Diversification Strategy: Investors are using gold ETFs to balance their portfolios amid uncertain equity returns.

“Gold ETFs are increasingly becoming mainstream among Indian investors who previously preferred physical gold or sovereign gold bonds. The combination of transparency, liquidity, and SEBI regulation has made them a preferred choice,” said a Mumbai-based investment advisor.

Asia’s Growing Appetite for Gold ETFs

While India’s gold ETF inflows were the second highest in Asia, China continued to dominate the region’s gold investment landscape. The renewed US-China trade tensions and slower-than-expected third-quarter growth in Asia have driven investors toward safe-haven assets like gold.

Regional analysts suggest that this strong demand will likely continue into early 2026, especially if geopolitical and inflationary pressures persist. “The Asian gold market is witnessing a structural shift where ETFs are playing a bigger role in channeling institutional and retail money into gold,” an analyst at Nomura said.

Outlook: Will India Maintain Its Gold ETF Momentum?

Experts predict that India’s gold ETF inflows may continue to rise in the near term as festive and wedding season demand converges with global safe-haven sentiment. With AUM crossing $11 billion and growing investor participation, India is fast emerging as a key global player in gold-backed ETF investments.

However, the outlook will depend on US interest rate trends, dollar strength, and geopolitical stability. A stronger dollar or a sharp rebound in risk assets could slow inflows, but analysts believe structural adoption of ETFs will keep momentum positive.

“Gold’s long-term story remains intact. Whether for wealth preservation or diversification, Indian investors are increasingly finding ETFs to be the most efficient route to invest in gold,” said a fund manager from a leading asset management company.

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