After the glitter, a retreat: Gold ETFs log first pullback in 11 months

₹77 crore exit halts golden run driven by record inflows

Gold exchange-traded funds (ETFs) saw their first outflow in nearly a year as investors cashed in profits following a sharp price increase.

 

According to the Association of Mutual Funds in India, gold ETFs recorded a net outflow of ₹77 crore in March, after strong net inflows of ₹1,980 crore in February.

 

Analysts pointed to profit-taking and portfolio rebalancing as key factors, particularly amid a correction in the equity market.

 

“The dip is a result of profit-taking by investors following a sustained rally in gold prices. Some investors also rebalanced their portfolios by reducing exposure to gold, leading to temporary outflows from the category,” said Nehal Meshram, senior analyst — manager research, Morningstar Investment Research India.

 

In 2024-25, gold ETFs attracted record inflows of ₹14,851 crore — almost three times the previous year’s total — amid rising gold prices. Gold emerged as India’s top-performing asset class last financial year, with ETFs yielding nearly 30 per cent returns.

 

Driven by global economic uncertainty, inflation, geopolitical tensions, and a weakening rupee, gold prices climbed, enhancing the appeal of the safe-haven asset. This rally, combined with strong inflows, lifted gold ETF assets under management by 53 per cent, reaching ₹58,888 crore by March’s end.