Gold ETFs continues to see inflows for sixth straight month in September

The Gold ETF category continued to receive net inflows for the sixth straight month in September. The category received inflows of Rs 597 crore in September, taking its year-to-date total to Rs 5,957 crore, data from Association of Mutual Funds in India show.

Gold prices came-off its all-time high of about Rs 56,200 it hit in August, after witnessing almost an uninterrupted rally this year. This probably has provided a good entry point for investors to invest in yellow metal. On Friday, December gold futures were up 0.8 per cent on MCX to Rs 50,584 in early trade.  

“With all major economies staring at recession due to the spread of coronavirus pandemic, gold, with its safe-haven appeal, has emerged as one of the best performing asset class and a preferred investment destination among investors. Moreover, as the surge in coronavirus cases have cast a doubt on the swift recovery hopes, investors continue to hedge their exposure to riskier assets by investing a portion of their assets in gold, as it is seen as a safe haven in times of uncertainty,” said Himanshu Srivastava, Associate Director – Manager Research, Morningstar India.

He added that this segment may continue gaining traction among investors considering the threat posed by the coronavirus pandemic to the global economy and the markets.

Gold functions as a strategic asset in an investor’s portfolio, given its ability to act as an effective diversifier, and alleviate losses during tough market conditions and economic downturns.