Gold exchange‑traded funds (ETFs) attracted a record‑breaking surge in India during the April‑June 2026 quarter. Investors poured more than twice the amount they had invested a year earlier, turning to paper gold as prices climbed to new highs.
The World Gold Council (WGC) data shows ETF demand rose to 4.2 tonnes from 2.8 tonnes, a 49 % jump in volume. In value terms, flows climbed 136 % to Rs 6,300 crore, up from Rs 2,670 crore in the same period last year. In dollars, the inflows doubled from $0.3 billion to $0.6 billion.
Gold ETFs offer exposure to the metal without the costs of storage, purity checks or making charges. They also provide instant liquidity and lower transaction costs, making them attractive when physical gold becomes expensive.
While total gold demand in India fell 6 % year‑on‑year to 131.4 tonnes, jewellery demand dropped 15 % to 75.1 tonnes. In contrast, investment demand for bars and coins rose 9 % to 50.3 tonnes, showing that investors still view gold as a safe haven.
Louise Street, Senior Markets Analyst at WGC, said the early‑year rally had cooled but the market remained well‑supported. She added that ETF flows tracked price movements but central bank buying and OTC investment kept overall demand slightly higher.
Experts point to geopolitical tensions, expected interest‑rate moves and inflation worries as key drivers of ETF inflows. The ease of buying through mutual‑fund platforms and stock exchanges has also broadened retail participation.
Sachin Jain, Regional CEO for India at WGC, noted that Indian gold ETFs attracted 4.2 tonnes of net inflows despite global outflows. He added that the festive and wedding season in the second half of the year is expected to support demand, though high prices may still influence buying patterns.
The trend indicates that Indian investors are separating gold as a consumption item from gold as a financial asset. Households are deferring jewellery purchases but maintaining exposure to gold via ETFs to hedge against market volatility.
If the pattern persists, gold ETFs could take an even larger share of India’s investment demand in the coming quarters, while physical gold purchases will continue to be sensitive to price swings.