Gold ETFs Attract Record Flows; Mirae Asset Warns on Spot Price Tracking

COMMODITIES

Overview

Mirae Asset Investment Managers anticipates sustained strong inflows into Gold Exchange Traded Funds (ETFs), while showing caution towards Silver ETFs. This investment trend, observed over the past year, has seen Gold attract approximately ₹64,000 crore and Silver ₹32,000 crore. Daily trading volumes in precious metals have surged significantly, but investors are cautioned that Indian ETFs precisely replicate domestic spot prices, not international benchmarks or MCX futures.

Mirae Asset Investment Managers forecasts a continuation of robust investor interest in Gold Exchange Traded Funds (ETFs) in the coming months. Siddharth Srivastava, Head of ETF Product & Fund Manager, noted that this trend is not a recent phenomenon but has been building for over a year. Gold has attracted substantial inflows of approximately ₹64,000 crore in the past twelve months, while Silver has seen inflows of around ₹32,000 crore.

Surge in Trading Activity

Beyond long-term investment, Srivastava highlighted a dramatic increase in trading and short-term participation within the precious metals segment. Average daily trading, which was once around ₹1,100 crore, has now shot up to nearly ₹8,000 crore this year, partly driven by investors chasing returns.

Crucial Investor Caution

However, Srivastava cautioned investors against the assumption that ETF prices always mirror global trends. He emphasized, "People have to be cautious that ultimately these ETFs will replicate and give returns which are corresponding to domestic spot and not international spot or MCX futures." This distinction is critical for investors seeking to align their expectations with the actual performance drivers of their ETF holdings in the Indian market.

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