Gold ETF inflows double to ₹24,040 crore in January, nearly matching equity flows as investors seek safety
Indian investors began 2026 with a strong shift toward safety, channeling record sums into gold-backed exchange-traded funds as uncertainty around global growth, policy direction and geopolitics continued to shape allocation decisions.
Gold-focused ETFs drew ₹24,039.96 crore in January, more than doubling from ₹11,646.74 crore in December, industry data showed. The 106% month-on-month jump marks the strongest inflow in recent months and places gold almost on par with equity fund inflows of about ₹24,029 crore for the same period.
The scale of the move highlights how gold—long viewed in India as a store of value—has become an increasingly mainstream financial hedge through regulated market products rather than physical holdings.
The growing preference for safety reveals how investors are reading the macro environment
The near-equal split between gold and equity flows in January reflects how investors are balancing growth ambitions with capital preservation.
Market participants say the renewed appetite for gold is tied to a mix of global economic uncertainty, expectations that major central banks may eventually ease monetary policy, and persistent geopolitical risks. In such phases, gold typically regains favour as a defensive allocation.
For institutional allocators and wealth managers, the flows suggest that portfolio hedging is no longer a tactical afterthought but an active part of asset allocation at the start of the year.
The latest numbers paint a clear picture of where money is moving
Available data outlines a steady build-up in momentum:
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Gold ETF inflows reached ₹24,039.96 crore in January
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December inflows stood at ₹11,646.74 crore
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Equity fund inflows were about ₹24,029 crore in January
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Total ETF and overseas-oriented fund inflows rose to ₹39,954.63 crore from ₹26,723.24 crore in December
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Silver ETFs saw about ₹9,463.4 crore in inflows, with assets under management at ₹1.16 lakh crore
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Index funds recorded negligible inflows of ₹23 crore
Gold ETF flows had stayed moderate for much of last year before strengthening toward the end of 2025. Inflows rose to ₹7,700 crore in October, eased to ₹3,741.79 crore in November, and then rebounded in December, setting the stage for January’s spike.
Nehal Meshram, Senior Analyst at Morningstar Investment Research India, said the trend points to sustained safe-haven demand.
Part of January’s strength likely reflects fresh allocations at the start of the year as investors rebalance portfolios after volatility across risk assets, she said. Gold ETFs, she noted, offer a regulated, liquid and cost-efficient way to hold gold, making them a convenient hedge during uncertain macro phases.
Some parts of the story are still unfolding as deeper data is awaited
While the topline numbers are clear, the composition of flows is less visible.
It is not yet clear how much of January’s surge was driven by large institutional mandates versus retail investors. Detailed segmentation data is awaited and could provide better insight into whether the move is strategic or tactical.
January is also a month when portfolio rebalancing and fresh allocations typically take place, which can temporarily inflate flows into certain categories. Whether the trend sustains beyond the first quarter remains to be seen.
The impact is most visible in the fund industry even as broader markets watch closely
The strongest immediate effects are within the asset management ecosystem.
Higher ETF inflows can support fee income for fund houses with established passive platforms and may accelerate product development in commodity-linked and passive strategies.
Silver ETFs drawing strong flows alongside gold suggests that investors are exploring the broader precious metals space rather than relying on a single hedge.
At the same time, muted index fund flows indicate that investors are being selective, not indiscriminately shifting into all passive products.
There is, for now, little evidence that gold buying is meaningfully displacing equity investments, which remain robust by historical standards.
The longer story shows how gold’s role in Indian portfolios has been evolving
Globally, gold demand often rises when real yields are volatile, inflation risks linger, or geopolitical tensions intensify. The current cycle appears to be no exception.
In India, gold has traditionally been held in physical form, but financialisation through ETFs and sovereign gold bonds has gradually changed investor behaviour. Financial gold reduces storage costs, improves liquidity and fits more easily into modern portfolio frameworks.
January’s data suggests this transition is deepening, with gold ETFs increasingly treated as a structural allocation tool rather than a crisis-only refuge.
Market voices reflect both optimism and caution around the rally
Industry leaders see the trend through different lenses.
A. Balasubramanian, Managing Director and CEO of Aditya Birla Sun Life AMC, said the recent rise in gold and silver prices has pushed investors to seek exposure through ETFs, though he emphasised that equities remain the preferred asset class for long-term wealth creation.
Vikas Gupta of Omniscience Capital offered a more cautious take, saying investors allocating at significantly elevated gold prices could risk disappointing long-term outcomes.
The divergence underscores an enduring debate over whether gold at higher price levels serves as prudent insurance or an expensive late-cycle trade.
For investors, the message is about balance rather than bold bets
For portfolio builders, the latest flows reinforce gold’s role as a stabiliser.
Gold can help cushion volatility during risk-off periods, but its long-term return profile differs from growth assets like equities. Entering after sharp rallies can compress future gains, making allocation discipline important.
ETFs provide liquidity and transparency, but advisers often recommend capped exposure within diversified portfolios rather than concentrated positions.
For policymakers, higher financial investment in gold instead of physical imports can also be constructive from a macro standpoint, potentially easing pressure on the current account over time.
The next few months will reveal whether this is a shift or a spike
Several factors will shape the trajectory ahead:
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Signals from major central banks on rate direction
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Changes in geopolitical risk levels
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Inflation trends across key economies
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The relative performance of equity markets
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February and March fund flow data
If uncertainty persists, gold ETFs may continue to attract allocations. If risk appetite revives, flows could rebalance toward equities.
For now, January’s surge tells a clear story: investors are not retreating from risk entirely, but they are building stronger buffers—and gold is once again central to that strategy.
