In 2025, Gold Exchange-Traded Funds (Gold ETFs) have emerged as a preferred investment avenue for Indian investors seeking a safe and efficient alternative to physical gold. Amidst global economic uncertainty, inflationary pressures, and volatile equity markets, Gold ETFs offer an effective means of portfolio diversification. Traded on stock exchanges like the National Stock Exchange (NSE), these funds mirror the price of domestic gold, with each unit typically representing 1 gram—providing investors access to the asset without the complexities of physical storage.

Why Gold ETFs Are Gaining Popularity

As per data from the National Stock Exchange of India, Gold ETFs are attracting increased investor interest due to a combination of structural advantages and supportive macroeconomic conditions:

• Transparency & Liquidity: Seamless trading on NSE allows investors to buy and sell units at real-time market prices.

• Secure and Convenient: Eliminates risks associated with physical gold storage.

• Assured Purity: Each unit is backed by physical gold of at least 99.5% purity.

• Portfolio Diversification: Serves as a hedge against equity volatility, inflation, and currency fluctuations.

• Cost Efficiency: Avoids making charges and reduces storage and insurance expenses associated with physical gold.

Rising Investment and Expanding AUM

The growing preference for Gold ETFs is reflected in recent inflow and asset management trends:

• Gold ETFs recorded net inflows of ₹2,080 crore in June 2025, signaling robust investor confidence.

• Assets Under Management (AUM) surged to ₹64,777 crore as of June 30, 2025, up from ₹34,355 crore in June 2024—representing an impressive 89% year-on-year growth.

This surge underscores a shift toward safer, inflation-hedged instruments amid market volatility.

Global Trends Supporting Gold Investment

Global economic dynamics continue to support gold’s appeal as a safe-haven asset:

• Anticipation of interest rate cuts by the US Federal Reserve has decreased treasury yields, enhancing gold’s relative attractiveness.

• A weaker US dollar typically leads to stronger gold prices globally.

• Persistent geopolitical risks and concerns over economic slowdowns have reinforced the metal’s safe-haven status.

In the domestic market, Multi Commodity Exchange (MCX) gold futures have hovered around ₹97,400 per 10 grams, reflecting sustained investor appetite.

Conclusion

Gold ETFs provide a reliable, cost-effective, and transparent route for investors to gain exposure to gold. With steadily rising inflows, expanding AUM, and favorable global and domestic conditions, Gold ETFs are poised to remain a strategic investment tool for Indian investors in 2025.