Gold ETFs see over sixfold inflow increase in September 2025 YoY, driven by geopolitical tensions and rising prices: ICRA Analytics report

This Dhanteras, investors are flocking to Gold ETFs (Exchange Traded Funds) due to geopolitical tensions and a sharp rise in gold prices. Inflows surged over six times (578.28%) to ₹8363 crore in September 2025, compared to ₹1232.99 crore in the same period last year. The net inflow has seen a CAGR growth of 69.53% over the past five years, from ₹597 crore in September 2020.

According to the ICRA Analytics report, domestic gold prices have surpassed ₹ 1 lakh per 10 grams. Additionally, global factors such as central bank buying, geopolitical tensions, and expectations of US rate cuts have made gold a favored safe-haven asset.

“These factors have boosted gold ETFs in popularity, as investors prefer to park their funds due to better liquidity, transparency, and global price alignment. Compared with physical gold, these instruments offer easier storage. Furthermore, concerns about purity and theft when investing in physical gold are not an issue with Gold ETFs,” said ICRA Analytics.

Net inflows increased by nearly 281.96% month-on-month from ₹2189.51 crore in August 2025. Net AUM of gold ETFs grew by 126.34% to ₹90,135.98 crore in September 2025, up from ₹39,823.50 crore in September last year. On a month-on-month basis, net AUM rose by 24.33% from ₹72,495.60 crore in August this year.

Ashwini Kumar, Senior Vice President and Head Market Data, ICRA Analytics, said, “Escalating geopolitical tensions, global uncertainties and overall dynamic outlook seem to be boosting the safe-haven appeal of the bullion. Investors favour investing in Gold ETFs due to liquidity, transparency, cost-effectiveness, and ease of trading compared to physical gold. The attractive rate of returns on a majority of these ETFs has also been a big draw for investors. The assets under management have nearly doubled year-on-year. For investors seeking portfolio diversification, inflation protection, and tax-efficient exposure to gold, ETFs remain a compelling option. Strategic entry after short-term corrections, such as post-Diwali, could offer attractive opportunities for phased investments.”

There are as many as 22 Gold ETFs in the market at present, of which four were launched during calendar year 2025.