Gold ETFs Witness Profit-Booking After 10-Month Inflow Streak

Gold Exchange Traded Funds (ETFs) saw their first outflow in 10 months this March, with investors pulling out ₹77 crore. This comes after a significant ₹1,980 crore inflow in February. The shift in sentiment is attributed to profit-booking as gold prices hovered near record highs. Many investors chose to lock in gains after a sustained rally in gold prices.

Additionally, portfolio rebalancing ahead of the new financial year contributed to the outflows. Some investors reduced their exposure to gold, opting to diversify their portfolios. Despite this temporary dip, experts believe the long-term appeal of gold remains strong. Gold continues to be a reliable hedge against macroeconomic risks and market volatility.

In February, geopolitical tensions and inflationary concerns had driven strong inflows into Gold ETFs, as investors sought safe-haven assets. However, March saw a tactical exit by some investors, reflecting short-term adjustments rather than a loss of faith in gold’s potential.

Analysts suggest that while monthly flows may fluctuate, gold’s enduring value in diversified portfolios is unlikely to diminish. The broader investment trend for FY25 remains positive, underscoring gold’s role as a stable and strategic asset.