Gold ETFs see record inflows in December 2025
Net inflows into gold exchange-traded funds (ETFs) surged to a record ₹1,16,467 crore in December 2025, nearly triple the amount from the previous month, data from the Association of Mutual Funds in India (AMFI) shows. The sharp jump reflects growing investor appetite for gold-backed products as a hedge against persistent macroeconomic uncertainty.
How big is the move?
The December figure marks an unprecedented monthly inflow for gold ETFs in India. Fund houses reported heavy subscription activity across schemes, lifting assets under management (AUM) for gold-focused funds and underscoring a clear shift in investor preference toward paper gold over physical holdings.
Why investors flocked to gold ETFs
Several factors helped push flows to these products:
- Macroeconomic uncertainty: Elevated inflationary pressures, geopolitical tensions and shifting global interest-rate expectations made gold an attractive safe haven.
- Portfolio diversification: Investors increasingly used gold ETFs to balance exposure to equities and bonds as markets experienced volatility.
- Convenience and cost: Gold ETFs offer easy access, lower transaction and storage costs compared with physical gold, appealing to retail and institutional buyers alike.
- Liquidity and transparency: Listed on exchanges, ETFs allow for intraday trading, transparent pricing and clearer tracking of fund holdings versus physical markets.
Who benefited?
Asset managers running gold funds saw a sharp rise in net inflows and AUM, while exchanges recorded heightened trading activity in gold ETF units. Retail investors — from small savers using systematic investment plans to high-net-worth individuals seeking portfolio protection — all contributed to the demand spike.
Broader market implications
Large inflows into gold ETFs can exert multiple effects on the financial ecosystem. They typically boost liquidity in the gold-backed product segment, encourage fund launches or expansion by asset managers, and can temporarily increase demand for the underlying commodity via market-makers and authorized participants who manage ETF creation and redemption. For investors, the move signals a broader preference for liquid, financial instruments to express exposure to gold rather than buying physical jewellery or bullion.
What to watch going forward
- Macro indicators: Continued inflation trends, central bank policy moves and global growth data will influence whether flows persist.
- Market volatility: Spikes in equity or currency volatility could keep gold ETFs in demand as defensive allocations.
- Product innovations: Any new features — such as lower expense ratios or more flexible creation mechanisms — may further attract investors.
Takeaway
The record December inflows highlight the role of gold ETFs as a preferred, modern route to gain exposure to the metal during uncertain times. For investors, the episode underlines the importance of simple, liquid instruments for risk management. For the broader market, it shows how quickly sentiment can translate into sizable capital shifts when uncertainty rises.