Indian gold exchange-traded funds (ETFs) witnessed a sharp surge in investor interest in 2025, with holdings rising 65% year-on-year to 95 tonnes by the end of December. The strong demand was driven by heightened market volatility – triggered by trade conflicts, geopolitical tensions, currency pressures and rupee depreciation, which pushed investors toward safe-haven assets.

The jump lifted India to the sixth position globally in gold ETF holdings, up from eighth place at the end of 2024, when domestic ETFs held 57.5 tonnes of gold, according to an analysis of World Gold Council data.

In terms of fresh money flows, India emerged as the third-largest gold ETF market globally in 2025, attracting an estimated $4.4 billion in net inflows, more than three times the $1.3 billion recorded in the previous year. The United States led the global chart with $50 billion in net inflows, followed by China at $15.5 billion.

The renewed appetite for precious metals also drove combined assets under management (AUM) of gold and silver ETFs past ₹2 lakh crore in December 2025, marking a nearly four-fold increase over the year.

Gold ETFs accounted for the bulk of the inflows, with AUM tripling from about ₹44,600 crore at the start of the year to nearly ₹1.3 lakh crore, underscoring the scale of investor participation. Silver ETFs also saw strong traction as investors sought diversification within precious metals.

Gold, silver shine amid global uncertainty

Analysts attributed the rally to a slew of factors, including elevated geopolitical risks, economic uncertainty, a weaker rupee and strong trend-following investment flows. Alongside retail investors, central banks globally stepped up gold purchases, reinforcing the metal’s status as a long-term store of value.

Gold marked its third consecutive year of record highs in 2025, surging over 60% during the year and clocking more than 50 all-time highs. It emerged as one of the world’s best-performing assets, touching a record $4,381.58 per ounce in October, according to World Gold Council data. In India, gold prices climbed to a historic ₹1,32,000 per 10 grams, with rupee depreciation amplifying domestic gains.

Silver outperformed even gold. Prices hit a global peak of $67.45 per ounce in December and crossed ₹2 lakh per kilogram in India for the first time. Backed by record investment inflows, structural supply deficits and tightening availability, silver emerged as the top-performing precious metal of 2025, delivering over 130% year-to-date returns.

Equities lag as metals outperform

The surge in precious metals was in stark contrast to Indian equities, which remained largely range-bound in CY25, underperforming global peers. According to Jefferies, Indian equities recorded their worst relative performance in nearly three decades against both Asian and emerging market peers, weighed down by sustained foreign outflows, slowing earnings growth and persistent currency pressures.

For the full year, the Sensex gained over 9%, while the Nifty 50 rose 10.5%. Global markets, however, posted stronger gains. The S&P 500 advanced 13.5%, supported by resilient earnings and continued enthusiasm around artificial intelligence. The MSCI World Index climbed 15.4%, Europe’s FTSE 100 surged 17.3%, while Asian peers outperformed sharply, with Japan’s Nikkei 225 soaring 31.5% and Hong Kong’s Hang Seng rallying 33.1%, aided by valuation-led rebounds and policy support.

Outlook remains supportive

The momentum in gold may be far from over. The World Gold Council expects prices could rise 15% to 30% in 2026 from current levels, citing falling yields, elevated geopolitical stress and a continued flight to safety.

“Investment demand, particularly via gold ETFs would remain a key driver, offsetting weakness in other areas of the market, such as jewellery or technology,” the WGC said in its Gold outlook report for 2026.

Despite the plausibility of a bearish scenario, it is likely that investors will maintain some exposure to gold given the unpredictability of current geo-economic dynamics, it added.

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