Gold prices fall 22% from record high, but ETFs attract ₹45,925 crore in 9M CY26, surpass 2025 collections

In calendar year 2026, investors have poured a record ₹45,925 crore into gold exchange-traded funds (ETFs), even as gold prices corrected nearly 22% from the record high touched in January. Net inflows into gold ETFs during January-September 2026 surpassed the ₹42,961 crore collected during the whole of 2025, according to AMFI data.

In September, gold ETFs attracted ₹4,451 crore in net inflows, up from ₹2,597 crore in August, marking the highest monthly inflow since January.

The trend suggests growing investor interest in gold as a way to diversify portfolios amid geopolitical uncertainty, rupee depreciation and volatile equity markets. While rising US Treasury yields have weighed on prices, central-bank purchases and expectations of festive demand in India continue to support the metal’s long-term appeal.

Spot gold was currently quoting at around $4,180.85 per ounce, down about 3% so far in 2026 and nearly 22% below its January record high of $5,379 an ounce. The recent correction in yellow metal has been driven in part by rising US Treasury yields, which make yield-bearing assets relatively more attractive than gold, a non-yielding asset.

However, market experts say the longer-term investment case for gold remains supported by central-bank purchases, de-dollarisation, geopolitical risks and expectations of festive-season demand in India.

What is driving gold ETF inflows?

Nehal Meshram, Senior Analyst at Morningstar Investment Research India, said gold ETFs continued to attract investor interest in September amid geopolitical tensions, concerns over the global economic outlook and uncertainty surrounding monetary policy.

“Gold ETFs continued their strong run in September 2026, attracting net inflows of approximately ₹4,451 crore, a significant increase from ₹2,597 crore in August and the highest monthly inflow since January,” Meshram said.

She added that central-bank purchases, the strength in gold prices and sustained demand for portfolio diversification had reinforced the metal’s appeal as a defensive asset during periods of economic and market uncertainty.

Gold ETF inflows during January-September 2026 have already exceeded the total for the whole of 2025, highlighting the growing role of the precious metal in investor portfolios despite elevated valuations and intermittent price volatility.

Nitin Agrawal, CEO, Mutual Funds at InCred Money, said gold ETF inflows accelerated to ₹4,451 crore in September, while assets under management (AUM) in the category stood at ₹1.86 lakh crore, approaching the recent all-time high.

“This is not speculative accumulation, it is defensive capital fleeing equity drawdowns and debt uncertainty,” Agrawal said.

Central-bank buying, geopolitical risks support demand

Despite the recent correction, structural demand for gold remains firm. Central-bank purchases, de-dollarisation and geopolitical uncertainty have reinforced its appeal among investors seeking to diversify their holdings. Expectations of higher demand during India's festive season could also support interest in the metal.

From an asset-allocation perspective, gold can help investors diversify their portfolios and reduce dependence on equities and debt instruments. However, its prices can remain volatile, and investors need to consider their overall asset allocation rather than make decisions solely on the basis of recent price movements.

Nirav Karkera, Head of Research and Fund Manager at W by Groww, said investor interest in gold had strengthened amid global economic uncertainty, pressure on the rupee and geopolitical tensions.

“Gold continues to draw strong interest, with flows into gold ETFs rising sharply. Investors are optimistic about the metal given the state of the global economy, pressure on the rupee and geopolitical tension,” Karkera said.

He added that gold was serving as a portfolio diversifier at a time when Indian equities remained volatile.