“Precious metals, particularly gold and silver, have performed very well in the last couple of months. Flows into gold nearly quadrupled in September, rising from about Rs 2,000 crore in August to around Rs 8,300 crore. This surge was largely driven by strong performance as well as investors seeking safety and diversification. In the same vein, multi-asset funds saw strong flows within the hybrid category,” said Anand Vardarajan, Chief Business Officer, Tata Asset Management.
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Another expert, while citing reasons for investors preference for gold mentioned that this surge in inflows in gold ETFs reflects a combination of global risk aversion and tactical positioning ahead of major central bank policy reviews.
“Gold ETFs witnessed a resurgence in safe-haven demand in September 2025, reflecting a combination of global risk aversion and tactical positioning ahead of major central bank policy reviews. Investors turned to gold as a reliable store of value amid heightened geopolitical tensions, volatile markets, and a stronger U.S. dollar,” Nehal Meshram, Senior Analyst – Manager Research, Morningstar Investment Research India said.
The inflow in gold ETFs in September is the all-time high level in the category and the highest monthly addition so far in the current fiscal. On a monthly basis, the inflows in gold ETFs witnessed a surge of nearly 282% from an inflow of Rs 2,189 crore in August to Rs 8,363 crore in September.
In comparison to an inflow of Rs 1,232 crore in September 2024, the inflows on yearly basis increased by 578%, according to the data released by Association of Mutual Funds in India (AMFI).
According to Nehal Meshram, the strong momentum underscores gold’s growing relevance as both a strategic portfolio diversifier and a hedge against macro uncertainty and domestically, investors increasingly viewed gold as an effective counterbalance to equity exposure, especially amid mixed global growth signals and currency fluctuations.
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The total assets under management (AUM) for gold ETFs went up by nearly 24% to Rs 90,135 crore in September compared to Rs 72,495 crore in August. On a yearly basis, the jump in AUM is by nearly 126% from Rs 39,823 crore in September 2024.
With cumulative net inflows exceeding INR 19,830 crore in FY2025, Gold ETFs have firmly re-established themselves as a preferred choice for portfolio stability and inflation protection, highlighting their role in preserving wealth during uncertain times, Nehal said.
Other ETFs which include silver based ETFs attracted an inflow of Rs 8,150 crore in September compared to Rs 7,244 crore in August.
Passive ETFs have also seen growth, with gold ETFs maintaining momentum and other ETFs rising from about Rs 1,500 crore last month to more than Rs 8000 crore now. Silver ETFs are catching attention too, as some investors are building allocations while others are chasing returns. We see interest in gold and silver continuing to persist unless there is a sharp correction,” said Suranjana Borthakur, Head of Distribution & Strategic Alliances, Mirae Asset Investment Managers (India).
Recently Kotak Mutual Fund announced that it has temporarily suspended lumpsum/switch in subscriptions in its silver ETF Fund of Fund with effect from October 10.
This move came in response to domestic silver currently trading at a significant premium compared to international prices due to acute scarcity in India’s physical silver market.
According to the fund house, the premium has increased from approximately 0.5% in early September 2025 to 5.7% as of October 9, 2025 and the intraday premium on October 9 peaked at 12% before closing at 5.7%. Current market conditions show a buying premium of approximately 10% and a selling premium of approximately 3%.
Also Read | Silver ETF: Kotak MF temporarily halts lumpsum and switch-in subscriptions in FoF
According to Kartik Jain, MD & CEO, Shriram AMC, “The September data underscores the increasing role of precious metals in long-term wealth diversification. For investors, it’s a reminder that balancing traditional equity and debt hybrid strategies along with strategic asset allocation to metals can strengthen portfolios against economic uncertainties, while tapping into avenues for long term growth.”
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