As gold prices surged to a record Rs 93,217 per 10 grams, Indian investors are pulling back from heavy jewellery buys and pouring money into gold exchange-traded funds (ETFs).
A recent report by Motilal Oswal Private Wealth said the investment demand soared 170 per cent year-on-year, driven by market volatility, geopolitical tensions, and the search for safer, smarter assets. Jewelry demand slumped 25 per cent in volume, but ETFs took centre stage.
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The report said that while traditional jewelry buying dipped by 25 per cent in volume, Indian investors were pouring their money into gold ETFs and digital gold products.
Investment demand soared 170 per cent year-on-year, largely thanks to robust gold-backed ETF inflows, especially in Europe, Asia, and India.
It added that while traditional jewelry buying dipped by 25 per cent in volume, Indian investors were pouring their money into gold ETFs and digital gold products.
Investment demand soared 170 per cent year-on-year, largely thanks to robust gold-backed ETF inflows, especially in Europe, Asia, and India.
Indian ETF holdings grew by 11 per cent, signaling a clear pivot toward paper gold, where convenience, liquidity, and compounding returns outweigh the emotional pull of ornaments.
The report said that the investment in gold ETFs led to a significant jump in gold investment demand in Q1 2025, reaching 552 tonnes, marking a 170 per cent y/y increase. This level almost matched that seen in Q1 2022 following the outbreak of the Russia-Ukraine war.
“The surge was primarily driven by a sharp revival in gold ETF inflows, which recorded their strongest quarterly demand for three years. Global gold-backed ETFs saw holdings increase by 226 tonnes during the quarter, bringing collective holdings to 3,445 tonnes. This was boosted by trade tensions and gold price momentum, with investors rushing for the safety of gold.”
