Gold exchange-traded funds (ETFs) experienced a significant surge in inflows in January, with investors pouring $500 million into these funds, according to data from the Association of Mutual Funds in India (AMFI).
The inflows in January marked the highest-ever recorded for gold ETFs in a single month, compared to $85 million invested in December 2024.
Over the past year, gold ETFs have seen remarkable growth. On an annual basis, these funds recorded a massive 471% increase in inflows, rising from $87 million in January 2024 to $500 million in January 2025.
In addition to the surge in investments, gold ETFs delivered impressive returns, offering an average gain of nearly 7.29% in January.
The spike in investments was driven by multiple factors, including rising gold prices and increasing market volatility amid US President Donald Trump’s tariff threats. With global uncertainties and geopolitical tensions affecting investor sentiment, many turned to gold as a safe-haven asset.
Expectations of interest rate cuts by major central banks, including the US Federal Reserve, have made gold more attractive. Lower interest rates reduce the opportunity cost of holding gold, further boosting demand.
Investors are also using gold ETFs to hedge against inflation and diversify their portfolios. As inflationary pressures continue to impact economies worldwide, gold remains a preferred asset for those seeking stability.
Gold prices have been fluctuating after hitting an all-time high earlier this week. However, prices dipped on Wednesday following hawkish comments from US Federal Reserve Chair Jerome Powell, who signaled a slower approach to rate cuts.
On the Multi Commodity Exchange (MCX), gold futures for April delivery declined by $4.60 to $1,131 per 10 grams.
In the global market, gold futures fell 0.18% to $2,892.76 per ounce.
On February 10, gold prices surged to new record highs in the domestic futures market as uncertainty over US President Donald Trump’s tariff policies increased demand for the yellow metal.
On that day, the price of 24-carat gold was $113.10 per gram, while 22-carat gold was $110.50 per gram, according to the India Bullion and Jewellers Association (IBJA).
