Gold ETFs receive inflows for six months in a row, may continue to gain traction1 min read . Updated: 14 Oct 2020, 03:41 PM IST
- This year so far, the category has received a net inflow of ₹5,957 crores
Gold ETF category continued to receive net inflows in the month of September too. That made it an uninterrupted net inflow for six months in a row. According to Amfi, the Gold ETF category received net inflow of around ₹907.9 crores in August and a net inflow of ₹597.3 crores in September. This year so far, the category has received a net inflow of ₹5,957 crores. "Gold prices came-off its all-time high in August, after witnessing almost an uninterrupted rally this year. This probably provided a good entry point for investors to invest in yellow metal," says Himanshu Srivastava, Associate Director – Manager Research, Morningstar India.
Gold and silver prices edged higher today in India, tracking stronger global rates. On MCX, December gold futures were up 0.8% to ₹50,584 while silver futures rose 1.8% to ₹61605 per kg. In the previous session, gold price had edged up ₹142 amid a choppy session while silver had gained 0.17%.
With all major economies staring at recession due to the spread of coronavirus pandemic, gold, with its safe-haven appeal, has emerged as one of the best performing asset class and a preferred investment destination among investors. Srivastava says, "Moreover, as the surge in coronavirus cases have cast a doubt on the swift recovery hopes, investors continue to hedge their exposure to riskier assets by investing a portion of their assets in gold, as it is seen as a safe haven in times of uncertainty."
"Considering the threat posed by the coronavirus pandemic to the global economy and the markets, this segment may continue gaining traction from investors," believes Himanshu Srivastava.
Gold functions as a strategic asset in an investor’s portfolio, given its ability to act as an effective diversifier, and alleviate losses during tough market conditions and economic downturns. This is where it draws it’s a safe-haven appeal, which has been on full display since 2019.