Silver ETFs attracted an estimated ₹4,900 crore of net inflows in June, reversing four consecutive months of net outflows totalling nearly ₹3,770 crore. Gold ETFs also returned to positive territory with estimated net inflows of around ₹2,900 crore, after witnessing their first monthly redemption in over a year in May.
The renewed interest came after a sharp correction in bullion prices. Domestic gold prices declined around 9.7 per cent during June, while silver tumbled 14.4 per cent, taking both metals to multi-month lows. The decline was triggered by a stronger US dollar, rising US Treasury yields, and growing expectations that the US Federal Reserve would keep interest rates higher for longer. The easing of geopolitical tensions also reduced demand for safe-haven assets.
The June inflows suggest many investors viewed the correction as a buying opportunity after staying on the sidelines in recent months, experts said. They added that even as inflows moderated after January's record surge, the long-term investment case for precious metals remained intact.
"Investors have increasingly turned to precious metals as a safe haven amid volatile equity markets, geopolitical uncertainty, and a weakening rupee. Gold's appeal has also been reinforced by its traditional role as an inflation hedge and a portfolio diversifier during periods of subdued equity market performance," said Amit Bivalkar, head - wealth at Equirus group.
According to the experts, the surge in gold and silver investments may not necessarily be due to individual investor flows.
"The multi-asset categories, including fund of funds (FoFs), have grown significantly in recent years, and are now major investors in gold and silver ETFs. It is possible that some of the fund managers would have raised their allocation as the price corrected," said Manuj Jain, cofounder, ValueMetrics Technologies.
The renewed buying follows an unprecedented run in precious metal ETFs over the past year. As gold and silver prices scaled record highs amid geopolitical uncertainty and expectations of monetary easing in the US, investors pumped in record sums in precious metals, with domestic investors increasingly opting for gold and silver ETFs and FoFs to take exposure. Gold ETFs had attracted a record ₹24,040 crore in January, while silver ETFs garnered an all-time high of ₹9,463 crore. Flows, however, moderated in the following months as bullion prices retreated from their peaks and investors booked profits.
While the prices have corrected, some investors remain on the sidelines.
According to Manish Bhandari, chief executive officer (CEO) and portfolio manager, Vallum Capital, gold's problem right now is not its thesis, but it is its timing. Kevin Maxwell Warsh's ascension as Fed chairman has repriced consensus from two 2026 cuts to none, and the dollar has moved accordingly, the DXY (US Dollar Index) climbing from 97.6 to 101.6. That alone explains most of the correction, since gold and the dollar have been reliably inverse for 50 years now.
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