Commodity ETF flows surge as gold and silver catch investors' fancy

Gold and silver ETFs see record inflows of ₹4,085 crore in June, driven by rising investor interest in precious metals amid global uncertainties and growing ETF acceptance for investment

Aggregate inflows into commodity exchange traded funds (ETFs) surged to a record high of ₹4,085 crore in June as silver ETFs continued to garner higher sums and gold ETF inflows bounced back post a period of profit booking.

 

Silver ETF inflows jumped 2.4 times month-on-month (M-o-M) to a new high of ₹2,005 crore. Gold ETF inflows at ₹2,081 crore was up 7-folds compared to the previous month’s tally. 

Experts said the higher investor interest in precious metals was driven by shifts in asset allocation amid global uncertainties. 

Other factors like the demand-supply equation and growing acceptance of the mutual fund route for precious metal investments are also contributing to higher ETF inflows. 

The ongoing rally in gold and silver prices have also contributed to the higher investor interest. 

 

“Gold continues to benefit from its traditional role as a hedge against macroeconomic instability, central bank balance sheet expansion, and ongoing geopolitical risks. Central bank buying remains strong, and themes like de-dollarisation are reinforcing gold’s strategic relevance in global portfolios,” said Vikram Dhawan, head-commodities and fund manager at Nippon India Mutual Fund.

 

“Silver, meanwhile, is gaining traction both as an industrial metal aligned with the green energy transition and as a high-beta complement to gold. The broader trend toward regulated, liquid, and cost-effective ETF structures, combined with a growing acceptance of asset allocation and multi-asset frameworks, is driving sustained investor interest across both metals,” he added.

 

The rising interest in silver and gold ETFs is also visible on the account addition front.

 

Silver ETF accounts have jumped 46 per cent to nearly 1 million in the first six months of 2025. Gold ETF accounts have risen 20 per cent to 7.7 million.

 

Gold and silver fund of funds (FoFs) have also seen a significant rise.

 

MF officials say that apart from the individual and institutional buyers, gold and silver ETF flows are also driven by multi-asset MF schemes.

 

According to wealth managers, the growing silver and gold ETF flows can be attributed to the rising commodity allocation in investor portfolios. 

 

“With central banks globally navigating a divergent interest rate cycle and geopolitical risks remaining elevated, investors are increasingly using commodities as a hedge against both inflation persistence and potential tail risks,” said Ankur Punj, MD & national sales head, Equirus Wealth.

 

“With net inflows crossing ₹8,000 crore in the first half of 2025, Gold ETFs are increasingly being used as part of long-term asset allocation strategies,” said Nehal Meshram, senior analyst-manager research, Morningstar Investment Research India.