Coronavirus effect: Inflows into gold ETF hit all-time high of Rs 1,483 cr in Feb

Gold exchange-traded funds witnessed an all-time high net inflow of Rs 1,483 crore in February, as slowdown in global economy amid the coronavirus outbreak led investors to opt for the instrument as a safe haven.

This also marks the fourth consecutive monthly net inflow in gold ETFs.

The latest inflow comes amid a sell-off in broader market and sharp plunge in international crude oil prices.

According to the latest data available with the Association of Mutual Funds in India (Amfi), a net sum of Rs 1,483 crore was pumped in into gold-linked ETFs in February as compared with the 7-year high of Rs 202 crore in the preceding month.

Prior to that, the safe-haven asset saw an infusion of Rs 27 crore in December and Rs 7.68 crore in November. However, it had seen a net pull-out of Rs 31.45 crore in October.

In September 2011, Gold ETFs had attracted a total investment of Rs 988 crore.

"With global economy staring at a major slowdown as coronavirus epidemic tightening its grip across the globe, gold has emerged as the go-to asset class as it regains its safe-haven appeal. Consequently, the gold ETF category received a staggering net inflow in February," said Himanshu Srivastava, senior research analyst (manager research), Morningstar Investment Adviser India.

Alok Agarwala, head (research and advisory) at Bajaj Capital, said, "During turbulent times, gold is considered a safe haven and a store of value for the investors. The equity market mayhem is discernible caused by the coronavirus pandemic."