Gold Exchange Traded Funds (ETFs) witnessed an influx of Rs 31,561 crore in the January-March 2026 quarter amid heightening geopolitical conditions during the period, despite a significant slowdown in March, according to data from the Association of Mutual Funds in India (AMFI).
In March, the category saw net inflows of Rs 2,266 crore, which was a significant decline from Rs 5,255 crore in February due to less volatility in bullion prices amid rising crude prices and a strong dollar index due to tension in the Middle East.
The Gold ETFs recorded a whopping Rs 24,040 crore inflow in January--when gold prices were skyrocketing.
This took the total inflows to Rs 31,561 crore in the January March quarter or the fourth and final quarter of FY25-26, nearly sixfold higher than Rs 5,654 crore in the same quarter a year ago, 2025, as per Amfi data.
The development reflects investors' intention to seek the safety of the traditional safe-haven asset amid uncertain geopolitical tensions.
Inflow Rises 36% QoQ
According to the data, capital inflows grew by 36% on a quarterly basis to Rs 23,132 crore. Moreover, assets under management in gold ETFs, as well as investor accounts, have seen significant growth during the year.
Although the pace of capital inflows has slowed down quarterly, investors' interest in gold-based investment products remains positive. Capital inflows have slowed in March, reflecting a return to normalcy after a very strong growth at the beginning of the year, as well as a slight decline in new investments.
AUM Rises 300%
The assets under management (AUM) of gold funds have increased almost threefold due to strong and sustained capital inflows, rising to Rs 1.71 lakh crore till March 2026 from Rs 58,888 crore a year ago.
Gold has attracted significant interest from investors on the back of a sustained growth trajectory.
During the financial year, Gold ETF's portfolio numbers soared by 54.28 lakh to 1.24 crore in March 2026 as compared to 69.69 lakh in March 2025, indicating investors' strong inclination towards gold investment instruments.
Expert's View
"January saw unusually elevated inflows, likely supported by strong risk aversion, portfolio rebalancing, and momentum in gold prices, making subsequent monthly numbers look softer by comparison. Even so, March's positive flows suggest that gold continues to retain investor interest as a diversification tool amid market uncertainty and macro volatility," said Nehal Meshram, Senior Analyst, Morningstar Investment Research India.
According to Meshram, Gold ETFs remain appealing because they offer a liquid, transparent, and convenient way to gain exposure to the metal without the frictions of holding physical gold.
Umesh Sharma, CIO-Debt, The Wealth Company Mutual Fund, said inflows into gold ETFs moderated in March, lower than levels seen in previous months, likely as relative valuations turned more favourable towards equities compared with gold.
Gold ETFs are the passive investment instruments which aim to track the domestic physical gold price, that are based on gold prices and invest in gold bullion.
(With Inputs From PTI)