Gold ETFs and sovereign gold bonds were in demand today, surging up to 5 per cent, as the government's latest measures are expected to take the sheen off physical gold.
The gold exchange traded funds gained on BSE, with Axis Mutual Fund - Axis Gold Exchange Traded Fund - surging 5.14 per cent to Rs 2,926 per gram.
HDFC Gold Exchange Traded Fund jumped to Rs 2,910.32 per gram, up 2.61 per cent.
Similar was the case with IDBI Gold ETF that rose by 3 per cent to Rs 2,915 per gram and UTI Gold Exchange Traded Fund that went up by 1.70 per cent to Rs 2,781.40.
Sovereign gold bonds traded higher with gains up to 4 per cent in early trade.
While gold traded higher, gold futures rose by over 2 per cent at MCX.
The 30-share Sensex ended the day 338.61 points lower at 27,252.53 after earlier plunging 1,689 points -- its worst fall in nearly 15 months.
Trading in gold ETFs has been tepid in the last three financial years.
In September, investors pulled out Rs 77 crore from gold ETFs, taking the total withdrawal to Rs 539 crore in the first six months of the current fiscal.
The asset base of gold-linked ETFs account dropped to Rs 6,295 crore at the end of September, from Rs 6,349 crore in August-end.
The mutual fund sector has 14 gold-based schemes, which have been in the market since 2006-07.
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